Hanjin’s bankruptcy and the shock waves that followed have been felt all across the Pacific coast. Hanjin controls 8% of Trans-Pacific trade volume, most of which is concentrated in Korea, the Eastern Ports of China, and the Western Ports of North America. To stop seizure of ships carrying cargo, Hanjin has sought bankruptcy protection in 43 countries, including the U.S. and Canada, as per this report.
This would allow some respite to the continuing chaos around shipping schedules and chartering of vessels, as many of the current alliances between shipping lines include sharing of containers in the same vessel.
Shipper bankruptcy creates retailer havoc
Some major retailers are scrambling to work out contingency plans to get their merchandise to stores. They don’t have a lot of time. Giant container ships from the South Korean-based Hanjin shipping line are marooned with their cargo of what experts say are lots of TVs and printers, but also loads of home furnishings and clothing.
Cargo Ships Still Adrift Near LA/Long Beach Ports
One of Hanjin’s ships, the Greece, was on its way to the Long Beach port but has been drifting off the coast of Carlsbad and Oceanside, about 50 miles south of its destination, while the Boston and the Montevideo remain anchored in and around Long Beach port waters, according to the latest update from the Marine Exchange of Southern California, which manages ship traffic.
South Korean media reports indicate that Hanjin executives are using the firm’s assets, including a 54 percent stake in one of Long Beach port’s biggest terminals, Total Terminals International, to raise funds to get its cargo unloaded.
Parent Steps In to Help Unload Stranded Cargo
Hanjin Shipping had about 600 billion won in unpaid obligations such as charter fees and terminal use fees as of end-August, before a South Korean court approved its court receivership, South Korea’s maritime ministry said. Its debt stood at 5.6 trillion won at the end of 2015, and a bankruptcy would be the container shipping industry’s largest.
The funding plan unveiled on Tuesday aims to “alleviate a logistics crisis rather than normalizing the shipper overall,” Kang Sung-jin, an analyst at KB Investment & Securities, said in a report, adding that it will be difficult for the shipper to survive.
Hanjin’s Ghost Ships Seek Havens With Food and Water Starting to Dwindle
Hanjin container vessels carry as many as 24 crew each and pack enough food, fresh water and other essentials for several weeks. A journey across the Pacific from Busan to Los Angeles takes up to 10 days, while a trip via the Suez Canal to Rotterdam could take a month.
A request for food and water was rejected, said a captain via a satellite phone and who declined to use his name citing company policy. There should be measures to secure the safety of sailors, he said, adding they don’t know how long they should wait at sea.
The company, meanwhile, has started providing food, water and daily necessities to crews on six Hanjin ships anchored at ports including Rotterdam and Singapore. About 70 container movers and 15 bulk ships are stranded at 50 ports in 26 countries, according to Hanjin.
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Reference: News, Patch, Bloomberg
