Hanjin, the world’s seventh largest ocean shipper, filed for bankruptcy protection last week, sending retailers and other companies worldwide scrambling to get at cargo on Hanjin vessels that have been stranded outside ports.
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Hanjin Group said Tuesday it will inject $90 million, including $36 million from its chairman Cho Yang-ho’s personal assets, to help resolve disruptions to container cargo transport caused by Hanjin Shipping Co.’s financial troubles. Industry analysts say the ships are carrying $14 billion worth of merchandise – everything from electronics to clothing to furniture, and, according to one report, 80 tons of kimchi, a spicy Korean fermented vegetable side dish.
So far, the company is not behind in its rent payments, the bureau said, adding that it would closely monitor the handling of containers at the port.
“The lost volume will find its way to China and Busan will lose its competitiveness”, said Choi.
Hanjin’s global shutdown arrived just as the holiday shipping season got underway.
Cargo handling operators refused to work for the shipping company because they were anxious that the cash-strapped firm could not make payment. Hanjin Shipping declined to comment.
Ports have refused to accept Hanjin cargoes without guarantees that port fees will be paid. “The big concern is what will happen now”.
Hanjin’s parent firm, Hanjin Group, earlier pledged to raise 100 billion won in funds to help rescue cargo. Hanjin is under court receivership, and in addition to the suppliers lack of willingness to service the carrier’s vessels, these vessels also risk being arrested when they call in ports, which means that many Hanjin ships are now stranded outside of ports.
Decisions by the owner family have also been cited as a major factor in Hanjin Shipping’s financial woes. Their rally cry: “Save Hanjin!”.
Shares of Korean Air were traded down 5% in morning trade.
On two of those ships sat about $38 million worth of Samsung washing machines, refrigerators, microwaves and parts for televisions and monitors, according to documents filed with the court.
Will 80 tonnes of spicy kimchi stuck aboard three Hanjin Shipping vessels bobbing off the coast of California be unloaded before overripening?
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While Hanjin’s filing was not the only factor (China’s upcoming Golden Week holiday is also contributing), the shipping price from China to the USA west coast rose from $1,100 per container to as much as $1,700, and the price from China to the US east coast from $1,700 to $2,400 last week. The restructuring proposals submitted by Hanjin Shipping weren’t enough to address a cash shortage, main lender Korea Development Bank said Tuesday, dealing a blow to the revival efforts by a firm that’s been trying to reschedule debt under a voluntary creditor-led program since May.
