US retailers urged their government to take steps to minimize disruption from the collapse of South Korea’s Hanjin Shipping as more of its vessels have been seized or blocked from entering ports around the world.
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“We urge that Department of Commerce and the Federal Maritime Commission work together with all stakeholders, including ports, cargo handlers and the South Korean government, to resolve the immediate disruption and mitigate the harms posed by the current situation”.
Hanjin’s bankruptcy is the largest ever to hit the shipping industry so there’s no roadmap as to what will happen now, no precedent of comparable scale.
Hanjin handles about 7.8% of the trans-Pacific trade volume for the USA market, her letter said.
It was expected at the Hutchison terminal, CTAA says, with NSW Ports telling ATN it is scheduled to arrive in port tomorrow evening.
While Hanjin’s vessels are being frozen out of many ports, several other ship lines, including Hyundai Merchant Marine, are looking to step in and offer assistance. Already delivered cargo sits unhandled, clogging ports and occupying containers needed elsewhere.
Hanjin, the world’s seventh largest shipping line, carries goods and materials headed to retail shelves and other destinations. Of 8,281 owners of goods to be transported as of late August, 847 were South Korean firms, according to government data.
But weaker trade and overcapacity have sent ocean shipping rates plunging in recent years. This included the port of Busan, South Korea’s largest. Japanese shipping companies Kawasaki Kisen Kaisha and Nippon Yusen said they are working to limit delays to clients’ cargo.
COSCO said on its website on Wednesday that it was engaged in “emergency continency planning” of containers that might be on board of Hanjin Shipping’s vessels. The court said it had no choice but to act swiftly considering the impact on economies at home and overseas.
For now, retailers are also watching the situation unfold.
The $25 billion US toy industry has been sweating the Hanjin news, as it is stocking up for the holiday season, when about half its annual sales are made.
Smaller operators like Hanjin, which with 618,133 TEUs (Twenty-foot Equivalent Units) of container capacity is in the lower tier of the top 10 shippers, can not muster the scale needed to get by.
“They don’t know how they are going to fulfill those demands”, he said. While food should last long enough, they will eventually need fuel. “The ripple effect could be tremendous”, Mr. Bergmann said.
The worst case scenario for retailers would be empty shelves during the upcoming holiday shopping season.
Reclaiming cargo won’t be easy.
The Hanjin group suffered a severe blow to its reputation in 2014 when Cho Hyun-ah, Cho Yang-ho’s daughter and a vice president of Korean Air, threw a tantrum over how macadamia nuts were served to her on a flight and ordered the plane she was on to return to the gate at John F. Kennedy Airport in NY. A few months ago, Poskus said, prices hit historic lows globally down to as much as $600 per container from Shanghai to Los Angeles.
Another issue is the crews.
LG Electronics Inc.is trying to find new carriers for its goods, the world’s second-largest manufacturer of televisions said.
“They have food and water for a couple of weeks”, said Basil Karatzas of New York-based Karatzas Marine Advisors & Co. The cost of this would be vast, and would come on top of anything they had already paid to Hanjin beforehand.
The Port of Seattle could feel the impact of Hanjin’s bankruptcy as soon as Saturday.
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Angie Munson, SGSA’s executive director, told BRAIN that it was too early to tell how the bankruptcy would affect container shipments for the industry from key Asian ports. Hanjin Shipping spokesman Park Min did not confirm any other seizures. The original misspelled the name of Korean company Cho Yang as Cho Yamg.
