“I’m aware that some exporters are going through considerable difficulties from the Hanjin Shipping incident”, Bank of Korea Governor Lee Ju-yeol said at a press conference in Seoul on Friday.
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Hanjin’s fiscal troubles have come to a head during peak shipping season for products that will be sold during the holidays, a period in which the retail industry reaps roughly 20% of its sales for the year, according to the National Retail Federation.
United Parcel Service Inc (UPS.N) said on Thursday it is seeing a bump in demand for its freight services and is working with customers in Asia to shift goods from Hanjin containers to other ocean freight operators or air freight services.
The collapse of Hanjin has caused havoc in global trade networks and a surge in freight rates, as more than half of Hanjin’s 141 ships have been blocked from docking at ports.
The person said there was no consensus among directors, but discussions were continuing.
“We do not want to hold on to this cargo”, she said.
At the same time, some retailers may take the hit and deal with smaller profit margins instead of risking customers’ ire over increased prices.
For containers that have already been unloaded and that have been sitting on the Tarmac at USA ports, Ms. Volkov said the company had been working successfully with cargo owners to get their goods back in the supply chain and to their final destinations.
Hanjin would normally pay the fees for port usage and container handling as part of its freight services. With the South Korean shipper in receivership, it is unclear if shippers would recoup any added costs that they pay out of pocket to retrieve their goods.
Uncertainty about freight fees was leading to vast numbers of containers clogging warehouses at port terminals.
“But the biggest challenge right now is for people with cargo on Hanjin ships”.
Industry analysts expect the freight increases to be short-lived as more shipping capacity comes on line. “It will take several months to sort through the legalities, but any rate increase will be temporary”, said Navigistics Consulting president David St Amand.
Hanjin has been struggling to arrange financing to resume normal operations. “However, inventory availability is good”, said Hooker Furniture chief executive Paul Toms on Thursday.
“We haven’t reached a conclusion at today’s board meeting, so we have chose to discuss the matter again tomorrow”, a spokesman for Korean Air Lines said.
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But lawyers for Hanjin on Friday said a South Korean bankruptcy court approved the release of $10 million in funding to unload four Hanjin Shipping Co. chartered ships that have been sitting off US waters, including at least two off the coast of Southern California, lawyers for Hanjin said.
