The ships contain everything from computer parts to perishable food with numerous cargoes destined for the Christmas market in the United States and Europe.
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Also on Wednesday, a USA federal judge granted Hanjin temporary protection from creditors, which would allow for three Hanjin ships stranded at the port complex of Los Angeles and Long Beach to dock without fear of being seized, according to a report by the Associated Press.
What’s more, big-time companies that sell goods in the US marketplace – like Samsung and LG Electronics – now find themselves in need of another shipping company and with millions of dollars in products stranded at sea. Separately, South Korea’s ruling Saenuri Party asked the government to offer about 100 billion won of low-interest loans if the group provides collateral.
A USA federal judge on Tuesday agreed to grant Hanjin short-term protection from its creditors, temporarily allowing the embattled shipping company to dock at US ports without immediate fear of retaliation.
If the cargo can’t be unloaded immediately, Samsung would be forced to transport alternative parts by air to help meet contractual obligations, entailing “great costs”, it said.
If Hyundai Merchant were to buy all of Hanjin’s 141 ships, including 97 container movers, it could become the world’s fifth-biggest and Asia’s second-biggest container line with a market share of 5 percent, according to Alphaliner.
Analysts at Citigroup said that toys were likely to be the product most impacted as retailers awaited their shipments of Christmas goodies.
Most industry experts say they expect rates to normalize sometime in Q1 next year, but industry groups say that the Hanjin bankruptcy’s ripples are extending well beyond brands exposed to the shut down. For example, it would have to charter at least 16 planes at a cost of about $8.8 million to move 1,469 tons of goods, it said.
The filing noted: “If the vessels can not dock at Long Beach, the finished goods can not be delivered to Samsung’s retailer customers in the US”. “Hanjin’s bankruptcy doesn’t solve the industry’s rampant overcapacity problem”, the company said.
Philip Damas, a director at Drewry, an independent maritime advisor, told CNBC that Hanjin’s filing meant there was “a bit of chaos” ahead legally and operationally as exporters and importers tried to figure out where their cargos and products were. “This lack of a short term plan for these vessels will lead to mayhem”, it said in the filing. On Tuesday this week, Hanjin said it would spend $90 million, including $36 million from the personal assets of its chairman, Cho Yang-ho to resolve the issue of the cargo offloading.
What supplier would tow a large container vessel into a port or deliver supplies to the crew, knowing that the owner is unable pay for the service? “It remains unclear if the vessel would proceed to stops in Vancouver, British Columbia, and Seattle, he added”.
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After a week in limbo in the Prince Rupert harbour, the Hanjin Scarlet, was finally allowed to moor at the port’s container terminal at 6 a.m. PT Wednesday. The Northwest Seaport Alliance – the ports of Seattle and Tacoma – so far has not confirmed that Scarlet will land here.
