It’s one of the biggest shippers in the world, with ships often seen on Puget Sound and containers piled near our ports.
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Ships full of cargo are sitting out at sea with nowhere to unload, while containers are stuck on docks or in warehouses all over the world until they figure out how to get the goods moving again. The trade organization forecasts that major US retail container ports will handle 1.61 million Twenty-Foot Equivalent Units this month, down 0.6% from the same month a year ago, and said that “all parties” must work together to ensure that cargo gets onto retail warehouses and store shelves as intended.
Freight charges from South Korea surged about 50 percent after Hanjin Shipping filed for court receivership Wednesday, Korea Economic Daily reported, citing shipping industry officials it didn’t identify. Hanjin ships carry crews of 15 to 25 sailors, and with the vessels unable to call at ports, the sailors could be stranded at sea for weeks or longer.
Hanjin filed for court receivership on Wednesday after creditor banks made a decision to end financial support. After Hanjin Shipping that failed to receive fresh loans from the creditors following a month-long tug-of-war with the creditors was finally placed under court’s control yesterday, such concerns are already becoming reality.
One vessel has also been seized by a creditor in Singapore while firms in the United States have launched legal action against Hanjin to seize vessels and other assets over unpaid bills.
A report by the Federation estimates that USA ports will handle about 1.61 million container units this month, down 0.6 percent from September 2015.
Gonzales assured the release of those containers in MICT would not be affected by Hanjin’s troubles. Hanjin Shipping spokesman Park Min did not confirm any other seizures.
“The bankruptcy is a slap in the face to an industry that hasn’t adequately addressed the issue of overcapacity”, said Jock O’Connell, worldwide trade adviser to Beacon Economics.
The price of shipping a 40-foot container from China to the US jumped up to 50 percent in a single day, said Nerijus Poskus, director of pricing and procurement for Flexport, a licensed freight forwarder and customs broker based in San Francisco.
The company is foundering under a debt estimated at some six trillion won ($5.37 billion), posting a net loss of more than 473 billion won in the first half of this year after racking up total net losses of about 1.2 trillion won over the past three years. Shipping rates have soared as a result, increasing to $2,300 per container by Thursday, up from $1,700 four days earlier.
Freight-forwarding firms, which organize shipments, may be held liable for customer cargo that doesn’t arrive and are also anxious about the recovery of funds paid to Hanjin in advance for services promised.
A weakened economy since the 2008 recession hurt global demand and trade at the same time that steamship lines continued to build more and larger vessels vast ships that were conceived as cost-effective when freight costs were higher several years ago.
Even the biggest ocean shipping company, A.P. Moller-Maersk, is seeing its profits fall, and scrambling to cut costs.
Poskus expects the spike in prices to last a month or two.
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A fourth ship, the Constanza, which is owned by Hanjin but operated by NYK, was being allowed to dock in the afternoon of September 1 at the Yusen terminal at the Port of Los Angeles, Louttit said, because NYK is responsible for all costs and charges at the port. But he said prices would have to rise in order to be sustainable.
