“U.S. bound cargo is already being delayed at origin ports and Hanjin ships loaded with cargo idle unable to enter US ports, containers are being detained on arrival clogging already congested ports and preventing merchandise from reaching store shelves”. Brokers said freight rates likely would continue to rise in coming days as cargo owners are trying to get their goods from stranded ships and are willing to pay a premium.
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Roughly half of Hanjin Shipping Co Ltd’s container vessels have been blocked from ports since the South Korean firm’s collapse, putting manufacturers and their customers increasingly on edge about the fate of cargo and spikes in freight costs.
But most Japan aluminum traders were not affected.
Munson, who manages shipping rates for companies in the sporting goods industry as well as some in the bicycle industry, said she doesn’t think – at this point – that the impact in terms of delayed shipments, primarily to the West Coast, will be significant for the bicycle industry. The fees on Hanjin’s main shipping route between Busan and Los Angeles have jumped 55 percent to $1,700 per 40-foot equivalent box from $1,100, it said.
Spot Japanese aluminum import premiums were assessed at $66-$74/mt plus London Metal Exchange cash CIF Japan Friday, unchanged from Thursday, due to absence of trades, offers or bids.
After that deadline, any of the company’s arriving containers will be rejected.
Some major retailers are scrambling to work out contingency plans to get their merchandise to stores as the bankruptcy of the Hanjin shipping line has thrown ports and retailers around the world into confusion.
In the meantime, the question is what to do with more than 500,000 containers already loaded on Hanjin vessels.
But it’s unclear what will happen with goods sitting inside containers on board ships at sea.
Hanjin accounts for 7.8 percent of trans-Pacific trade volume for the US market.
Also, a container ship run by Hanjin Shipping was ordered to stand by instead of anchoring at a local port.
On Thursday, the Seoul Central District Court accepted the receivership application Hanjin made August 31.
Because many of Hanjin’s customers are located in the United States; i.e., businesses that manufacture overseas and import their goods here, there will be a need for parallel US based legal proceedings.
“This is a serious predicament for a lot of companies”, said Jock O’Connell, global trade adviser at Beacon Economics.
South Korea’s oceans ministry said on Friday the port authorities of Busan and Incheon will guarantee payments for qualifying services offered to Hanjin Shipping Co Ltd vessels.
There were fears over a Christmas shopping crisis after one of the world’s biggest shipping companies was left with a third of its cargo fleet marooned at sea.
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Kim Byung-hoon, a director at the KITA, said the association had confirmed that about 10 Hanjin vessels also had been turned away from Chinese ports or were waiting offshore. That wouldn’t even cover fuel costs for the huge ships, he said. 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.
