Nate Herman, senior vice president of supply chain at the American Apparel & Footwear Association in Washington, D.C., said he is trying to get as much information out to AAFA members to help resolve the situation. Hanjin said on Friday that number was incorrect. The company is working through contingency plans, he said.
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As of Thursday afternoon, one Hanjin vessel was waiting 40 miles south of the ports, another was anchored in the port of Long Beach inside the breakwater, and a third anchored just outside the breakwater, according to Kip Louttit, executive director of the Marine Exchange of Southern California.
One of the company’s container ships is due to arrive in Elliott Bay, but Terminal 46 is refusing to accept its cargo. Another was seized in Singapore late Monday.
Many ports are doing the same, for fear Hanjin won’t be able to pay its bills.
“The company is internally looking into measures in case our cargo gets stranded while it’s being shipped”, LG said in the email in a response to a Bloomberg query. With about 5 percent of ships in the global trading fleet sitting idle, there is plenty of room to take over Hanjin’s capacity and carriers already are discussing the possibility of adding ships, he said.
South Korea’s ailing shipbuilders and shipping firms, which for decades were engines of its export-driven economy, are in the midst of a wrenching restructuring. “We called the [shipping] agents and said, ‘What is going on?’ and they said they were told to stop”.
Hyundai Merchant plans to add four vessels to the USA starting September 9, and nine on Europe routes later this month.
“Korean shipping companies have suffered large losses, largely because charter rates on leased vessels were fixed in 2010 at a high level while actual shipping rates have fallen”, Nomura International analyst Young Sun Kwon in Hong Kong said in a research note.
Other shipping lines were moving to take over some of the Hanjin traffic but at a price. Nippon Yusen isn’t part of the same alliance but has a business partnership with Hanjin, spokesman Brandon Kitamura said.
The failure of the world’s seventh-largest container shipping company comes during the industry’s busiest season ahead of the year-end holidays, and has also sent manufacturers scrambling as they worry about the fate of their cargo and surges in freight rates.
Rate assessment has increased to $1,674 per 40ft container on the Shanghai-Los Angeles route, and by 19% to $2,151 on the Shanghai-New York route and by 39% to $1,826 on the Shanghai-Rotterdam route.
Hanjin Shipping, South Korea’s biggest shipping firm, announced the filing for receivership and a request to the court to freeze its assets, which the Seoul Central District Court planned to grant.
Hanjin Shipping Co.’s container boxes are stacked at a port yard in Busan on September 1, 2016.
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Hyundai Merchant Marine, now under a creditor-led debt restructuring scheme, may seek to take over Hanjin Shipping’s healthy assets, such as port terminals and global business networks. The group, which also counts airport services, logistics and mineral water among its businesses, is headed by Chairman Cho Yang Ho.
