Hanjin on Wednesday filed for court receivership after creditor banks chose to end financial support, and ports from China to Spain and the United States and Canada have refused entry to Hanjin ships in what is traditionally the industry’s busiest season ahead of the year-end holidays.
Advertisement
Anxious the prospect of harm on the global supply chain is “significant and apparent”, retailers asked the Department of Commerce and the Federal Maritime Commission to step in. While the government doesn’t expect a large impact on exports, there could still be some issues with machinery and textiles shipped via Hanjin, he said.
Port of Long Beach spokesman Michael Gold said its terminals are not accepting any new Hanjin imports or exports, while one terminal, TTI – in which Hanjin has a majority stake – is not even releasing any already-accepted Hanjin containers.
Three Hanjin vessels remained anchored off the Southern California coast. However, as of Wednesday morning, there were roughly 300 Hanjin containers loaded with imports waiting to be picked up. According to the company, the dock hasn’t worked on a ship since July and was being used for ship repairs. “This is at a much bigger scale so I would not be surprised if scores of boxes on stranded Hanjin vessels ever actually make it to their destination”. Further, the inability to return empty containers is causing backups and interfering with chassis availability.
Freight brokers told The Wall Street Journal that about 25,000 containers cross the Pacific daily on Hanjin ships.
In the meantime, Hyundai Merchant Marine is looking to absorb nothing but core assets from Hanjin Shipping.
Rate assessment has increased to $1,674 per 40ft container on the Shanghai-Los Angeles route, and by 19% to $2,151 on the Shanghai-New York route and by 39% to $1,826 on the Shanghai-Rotterdam route.
Meanwhile, the Korean Financial Services Commission went into damage-control mode. Already delivered cargo sits unhandled, clogging ports and occupying containers needed elsewhere.
Richard Ormond, a lawyer at Buchalter Nemer, which specializes in receiverships, said he has a client with $3 million worth of goods aimed for holiday sales stuck on a Hanjin vessel.
There is a big impact on the Canadian freight industry, said Ruth Snowden, executive director of the Canadian International Freight Forwarders Association.
This week’s edition of Furniture/Today carried a report on the challenges facing ocean carriers. The decline in trade comes on the heels of a ship-building boom. Since vessels already are operating at high capacity, shippers may wind up paying a premium to squeeze their cargo containers on board, said Jock O’Connell, worldwide trade adviser to Los Angeles-based Beacon Economics.
On its website, Maersk Line said that around 90 percent of global trade was transported by ship.
“Ports will not have these vessels because they are anxious port and other fees won’t be paid”, said Rahul Kapoor, a Singapore-based director at Drewry Maritime Services Pvt.
“They got the injunction in Korea, but most of their ships are out at sea or at foreign ports”.
Hanjin accounts for 7.8 percent of trans-Pacific trade volume for the USA market.
Advertisement
Hanjin handles about 7.8% of the trans-Pacific trade volume for the USA market, her letter said.
