Hanjin’s bankruptcy has sparked concerns across the world that its vessels won’t be able to pay docking fees and handling charges or their cargo might be seized by creditors.
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Meanwhile, Finance Minister Yoo Il-ho, the country’s top economic policymaker, said Wednesday that he expects the crisis to ease this week.
Chapter 15 is meant to allow a company to seek recognition by USA courts of orders issued overseas and to ask US judges to assist in a foreign corporate debt restructuring. A USA federal judge on Tuesday temporarily granted Hanjin’s request for protection from its creditors and scheduled a hearing for Friday.
As parent Hanjin Group and the South Korean government consider steps to salvage the shipping company, retailers in the US last week called for measures to help temper losses. “This is a very positive step for our customers”.
The failed Hanjin shipping group is desperately seeking funds to rescue $14bn (£10.5bn) worth of cargo stranded round the world following its collapse.
The bank said that while it was still considering the request, complying would raise breach of trust issues as there was no certainty that additional support would help the company survive.
“It’s a logistical mess”, Sherwood said. Though Hanjin is just one floundering South Korean shipping company, its potential to create holiday shopping chaos should not be understated.
The 381-acre former naval property brings in about $81 million for the port, but the lease expires in 2027. Hanjin Group is considering the offer. “For cargo here in the USA, either at port or on a vessel, they’re working with terminal operators and others to find the best solutions to get the cargo to move”. Some of those ships have been seized by the company’s creditors.
Three Hanjin ships continued to sit Tuesday off the coast of Southern California, with their crews (normally about 25 workers) languishing.
The world’s biggest smartphone maker has about $38 million (33.7 million euros) worth of its goods and parts on board two vessels operated by the distressed shipping company.
Samsung has said if those parts and goods don’t reach its factory in Mexico in time, it may be forced to spend a lot of money to ensure it meets its contractual obligations.
The group previously said it would provide 60 billion won in loans secured by the shipping unit’s stakes in overseas terminals such as Hanjin Long Beach. The company announced a 2.5 trillion won streamlining plan in December 2013 that included asset sales and cost reductions, and its earnings improved temporarily.
Reuters points out that Hanjin is the worlds seventh-largest container shipper, making this the global shipping industrys biggest bankruptcy ever in terms of capacity.
Any major bottlenecks ahead of Thanksgiving and Christmas could put a dent in the two-month shopping season, which netted some US$626 billion of sales a year ago in the United States. That compared with the largest, APM-Maersk, with around 622 ships and a 15.4 per cent market share.
Jensen, with Sea Intelligence Consulting, says in the few ports where cargo has been unloaded, owners are having their own problems. “There’s been a downturn in the containerized cargo trade since 2014”.
Exporters and importers are concerned that their merchandise shipments would be stuck on Hanjin’s container ships worldwide as the company’s ships would be held at ports as collateral for its unpaid bills.
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Decisions by the owner family have also been cited as a major factor in Hanjin Shipping’s financial woes.
