Dozens of massive container ships are stranded at sea, looking for a place to dock after one of the world’s largest shipping companies went bankrupt.
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With its assets frozen, Hanjin, which handles about 8% of all USA cargo, is faced with its ships not being allowed to unload or take on cargo as dock workers and tugboat pilots are concerned about not being paid.
But the board of directors of Korean Air Lines failed to reach a conclusion after two days of debate and put off its decision on the proposed funding scheme to Saturday, citing the problem of breach of trust, although Cho is likely to pony up the 40 billion won next week, the sources said.
One of the four vessels, the Hanjin Greece, was scheduled to berth in the Port of Long Beach on Saturday morning having been idling off Mexico.
A US federal judge on Tuesday temporarily granted Hanjin’s request for protection from its creditors and scheduled a hearing for Friday.
A judge in New Jersey has issued an order that is moving Hanjin cargo around the continent.
In the meantime, South Korean regulators said they were directing Hanjin Shipping vessels to unload cargoes in a few key ports, including in Singapore and Hamburg, Germany. Currently, 87 out of Hanjin Shipping’s fleet of 145 vessels are being denied entrance to ports or are otherwise facing difficulties with their operations. Hanjin must file for bankruptcy protection in foreign courts as well to prevent further seizures.
“We did have a limited number of containers hung up on those ships; there’s going to be some pricing pressure at this point”, chief executive officer John Idol said Wednesday at a conference in NY. Ltd. fails in its attempts to reorganize and emerge from bankruptcy proceedings in Korea, it would represent the largest container shipping company to date to collapse. It’s also been a factor in shipping rates rising and could hurt some trucking firms with contracts to pick up goods from Hanjin ships.
Peterson said that despite Hanjin’s bankruptcy, “TTI is current in all of its payments to us”. Last week, creditors led by the Korea Development Bank rejected a plan by Hanjin Group to spend another 500bn won ($447.2m) to rescue the shipping company, way short of Hanjin Shipping’s debts of more than 6tn won ($5.37bn).
Adding to the criticism, Choi, who owns Hanjin Shipping’s headquarters building in Seoul through a holding company, has reportedly collected 14 billion won annually in rent from the financially troubled shipper.
“It’s good news for all the ships that are now on the water waiting for berth”, said Noel Hacegaba, director of operations at the Port of Long Beach, where the company owns a majority stake in its largest terminal.
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“Shippers are working with other ocean freight partners to try to figure out ways to get their cargo onto other vessels”, Gold said.
