That spurred the shipping line to file for court receivership on August 31. Four vessels have also been seized as of Thursday, according to Hanjin Shipping.
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Cash-strapped Hanjin Shipping Co. was given provisional court protection in the USA on Friday to unload cargo at some ports without worrying about its ships being seized by its creditors, industry sources said Saturday.
Hanjin’s parent company, Hanjin Group, already has agreed to put up 100 billion won ($90 million) to help resolve the cargo crisis, but that hasn’t been enough to fully assuage concerns from both suppliers and cargo handlers. Hanjin ship captains have said they are running low on all supplies, rationing water and fuel to conserve what little supply they have left in case the matter isn’t resolved soon. There should be measures to ensure the safety of the crew, he said and added that they did not know how long they would wait at sea.
This capacity issue is not limited to cargo space on vessels importing goods to the U.S. While Hanjin ships arent being allowed to dock, ports also are not taking exports that were bound for Hanjin ships. There are truckers and trucking companies counting on Hanjin for large bulks of income. Because the shipping line was part of an alliance of shippers, it may have been carrying cargo that was sent on another carrier.
About 11,000 jobs in the Korean city of Busan are at risk if Hanjin isn’t rescued, according to Busan Port Development Association.
In the first seven months of this year, 1.8 per cent of Thailand’s exports was destined to South Korea.
Citigroup was less concerned about this possibility.
Earlier this week, Samsung said goods worth $38 million, mostly televisions and appliances, were stuck aboard two Hanjin ships. In a research note published this week, analysts at Citigroup indicated the availability of some toys, among other retail items, is likely to take a hit.
“U.S. bound cargo is already being delayed at origin ports and Hanjin ships loaded with cargo idle unable to enter USA ports, containers are being detained on arrival clogging already congested ports and preventing merchandise from reaching store shelves”, Retail Industry Leaders Association President Sandra Kennedy said in the letter last week to Pritzker and Federal Maritime Commission Chairman Mario Cordero. The company handles an estimated 7.8% of trans-Pacific freight destined for the U.S.
“We are at a very precarious economic situation”, said John Martin, a maritime economist and consultant to ports around the country.
It’s not just the major trade lanes that are affected by Hanjin’s troubles.
That person said the board was mulling a loan, not directly from the airline, using Hanjin’s port terminal assets as collateral.
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“The authorization from the South Korean court to pay to service the four ships at US ports should help to start alleviating the situation, ” says Jonathan Gold, the NRF’s vice president for supply chain.
