“Finally, given that Hanjin is part of a larger shipping alliance, uncertainty about its future is effecting the ability to move cargo unassociated with Hanjin”.
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For U.S. retailers, the situation brings fresh concerns about the holiday shopping season. The conglomerate he built helped propel South Korea into one of the world’s major economies.
And an employee at the Hanjin office in Felixstowe said that nobody within the United Kingdom operation was authorised to talk about the situation facing the company. And it added that port terminals throughout the US said they will turn away outbound containers destined for Hanjin ships, which, in turn, forces “U.S. exporters to rebook, truck, reload and repack their cargo into other carriers’ containers”. One ship had been seized, in Singapore.
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. A fourth vessel that was supposed to leave Long Beach on Thursday morning remained anchored inside the breakwater.
That left cargo headed to and from Asia in limbo, much to the distress of merchants looking to stock shelves with fall fashions or Christmas toys. “Someone from the garment industry called earlier today asking: ‘How long is this going to go on, because I’ve got clothing out there, ‘” Louttit said.
Chris Rogers, a research analyst at Panjiva, which tracks worldwide imports to the United States, said the situation isn’t yet dire but could become so. That requires trans-Pacific shipping, which is something Hanjin does.
South Korean financial authorities reportedly are considering letting South Korea’s No.2 Hyundai Merchant Marine Co. take over Hanjin’s good assets, such as its global marketing networks and personnel as well as its own 59 ships.
The National Retail Federation – the world’s largest retail trade association – urged the U.S. Secretary of Commerce and Federal Maritime Commission Chairman to work with the South Korean government and ports to try and prevent disruptions. “The impact on importers and exporters is having a ripple effect throughout the global supply chain”, he said.
“The Hanjin bankruptcy means a shock to the market – some of our shipper customers are making contingency plans and asked us to assess the impact of this on their supply chains”, said Philip Damas, director at Drewry.
An estimated 540,000 containers are expected to face delivery delays, according to the reports. “They’ve got bills to pay – they could literally close their doors over this”, said Peter Schneider, Fresno-based vice president of T.G.S. Transportation Inc. Hanjin Shipping spokesman Park Min did not confirm any other seizures. Considering its large presence in global trade, many have been anxious that its bankruptcy would deal a big blow to Korean exporters by delaying deliveries of exporters’ goods and payments.
As to whether Hanjin’s situation alone could alter the fundamentals of the current overcapacity situation long-term, FTR senior partner Larry Gross said that is not likely as Hanjin’s vessels will still be there and ultimately find a new home. Cargo owners said rates from Busan, Korea, to Los Angeles had risen by $600 per container by Thursday from $1,700 four days earlier.
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As capacity tightened overnight during such a busy time, shipping rates soared. That wouldn’t even cover fuel costs for the huge ships, he said.
