On Wednesday, Hanjin Shipping, South Korea’s largest and the world’s seventh-largest shipping company, filed for court protection after its creditors, led by the state-run Korea Development Bank, rejected its self-rescue scheme.
Advertisement
It was expected at the Hutchison terminal, CTAA says, with NSW Ports telling ATN it is scheduled to arrive in port tomorrow evening.
Three Hanjin container ships carrying a total of 10,000 containers were anchored off the coast of Southern California, awaiting instructions about what to do, said Capt. J. Kip Louttit, executive director of the Marine Exchange of Southern California, which tracks all the vessels headed for the Port of Los Angeles and the Port of Long Beach.
Also affected are ships not owned by Hanjin but contracted by it or belonging to its alliance members, along with cargo and containers on board those vessels.
But in the meantime, ship running costs can not be covered and dozens of vessels with thousands of containers are tied up in ports, about to be or not being allowed in, with a knock-on effect for customer supply chains and landside container transport and empty container park (ECP) operations.
USA retailers, bracing for a new blow right in the middle of the critical holiday-stocking season, asked the government to step in and help resolve a growing crisis caused by the near-collapse of South Korea’s Hanjin Shipping Co., one of the world’s largest container shipping companies.
The country’s maritime ministry said earlier that it will work to help smooth out flows in the cargo trade for local exporters and importers by putting in substitutes for Hanjin’s vessels that may be seized. “Some of it is sitting in Asia waiting to be loaded on ships, some is already aboard ships out on the ocean and some is sitting on US docks waiting to be picked up”.
Hanjin ships up to 20 percent of all LG products to the U.S. LG opened a warehouse in Fontana a year ago. October is the busiest month for cargo from South Korea to the USA, accounting for about 11.5 percent of the annual total.
The National Retail Federation, the world’s largest retail trade association, wrote to the U.S. secretary of commerce, Penny Pritzker, and the Federal Maritime Commission chairman, Mario Cordero, on Thursday, urging them to work with the South Korean government, ports and others to prevent disruption.
The Port of Long Beach said it is not letting incoming Hanjin vessels dock and not releasing any Hanjin containers from terminals.
And freight could rise as a result as well, they added.
Hanjin filed for court receivership on Wednesday after creditor banks made a decision to end financial support. The Seoul-based company said one ship in Singapore had been seized by the ship’s owner. “The impact on importers and exporters is having a ripple effect throughout the global supply chain”, he said.
Jon Talton of The Seattle Times writes that the effects of the bankruptcy “could be profound”. Korean Air loaned funds to Hanjin Shipping and bought shares in the container line in 2014 to become the biggest shareholder with 33 percent.
Advertisement
Until Hanjin, carrier bankruptcies were confined to smaller lines, but if a carrier this size goes down, it sends a signal of just how vulnerable ocean carriers are if they are not able to increase their rates in the coming year.
