The world’s seventh-largest shipping company, Hanjin Shipping Co., based in South Korea, has declared bankruptcy, which resulted in the company’s ships being barred from entering ports worldwide and unloading cargo.
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It was not clear whether or not Hanjin Shipping under court receivership has money to spare to employ dockers in order to unload cargoes, the Wall Street Journal explained.
The company said that some ships may not dock at their original destinations, which could become an issue for companies like HP, Samsung and Home Shopping Network, who said in court records or in court they had cargo on those ships.
That’s because other shipping companies have likely put some of their containers on the Hanjin vessels as well. To receive a final order on bankruptcy protection, Hanjin representatives will have to return to court on Friday. It threw supply lines into chaos, keeping Hanjin cargo off trains, leaving truckers with empty containers and spurring a backlog on docks around the world.
The financial and legal woes of Hanjin Shipping, which filed for bankruptcy last week, have left as much as US$14 billion worth of cargo stranded at sea, the Wall Street Journal reports.
Volkov says the company had $10 million in a U.S. bank account to pay to service four container-laden ships bound for the U.S. Court papers show a total of 13 ships either owned or leased by Hanjin whose next port of call is in the U.S.
“All these costs and delays will be a loss not only to Samsung, but also to major retailers in the USA and, ultimately, to U.S. consumers”, Samsung said.
An arrest warrant was entered against the Hanjin Montevideo, now anchored off Long Beach, and the ship was seized.
For containers that have already been unloaded and that have been sitting on the Tarmac at USA ports, Ms. Volkov said the company had been working successfully with cargo owners to get their goods back in the supply chain and to their final destinations.
As parent Hanjin Group and the South Korean government consider steps to salvage the shipping company, retailers in the United States have called for measures to help temper losses. The rest, $36million, will come from Hanjin Chairman Cho Yang-ho’s personal assets.
They have been banned from docking in the US, China and many other countries until there are guarantees of payment for service firms and port workers. Shares of Hanjin Shipping have tumbled 61 per cent this year compared with a 5.5 per cent gain in the benchmark Kospi index.
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“We formed the alliance to minimize losses for owners of goods in Southeast Asian routes caused by Hanjin Shipping Co. under court receivership and stand more formidably against global alliances, ” said an official of Hyundai Merchant Marine.
