by Kyunghee Park (Bloomberg) South Korea said Hanjin Shipping will try to steer vessels to ports to unload cargo as the government tries to contain global supply-chain disruptions stemming from the container line’s filing for court receivership.
Hanjin’s ships will make calls at ports including Singapore, Hamburg and Busan, South Korea, where its vessels are unlikely to get stranded, Vice Finance Minister Choi Sang Mok said in Seoul Monday. Regulations at these sites make them less likely places where the ships can get stuck, Choi said. Korea’s Financial Supervisory Commission said 79 of Hanjin’s vessels, including 61 container ships, have had their operations disrupted.
“The government is trying to extinguish the most immediate fire,” said Kim Tae Il, a research analyst at the Korea Maritime Institute in Busan. “This is going to help ease some of the bottlenecks in the supply chain. So those toys held up in container boxes will be able find their way to consumers.”
South Korea’s largest container-shipping line is seeking stay orders in 43 countries to protect its vessels from being seized due to legal actions by creditors following the court receivership filing last week that stranded cargo liners in mid-voyage and roiled companies’ supply chains before the year-end shopping season. Offloading the containers may help customers like LG Electronics Inc. get their televisions and other cargo back on land and book the products onto other ships or for transport by land.
For an interactive map to see where Hanjin’s ships are stuck, click here.
“Given the vast amount of cargo and value remaining on the vessels, Hanjin’s administrators will have to do all they can to get the ships into ports, as they have to avoid additional claims against Hanjin for delays and possible damages,” said Harald von Seydlitz-Kurzbach, managing director at Bremen, Germany-based Reck & Co, which is part of the Lloyd’s Agency Network representing cargo interests in legal disputes.
Eurogate, Hamburg’s second-biggest container-terminal operator, informed customers on its website that cargo handled under contract with Hanjin “will only be granted against a cost assumption declaration and payment of all costs.” Spokeswoman Corinna Romke declined to comment further. Larger operator Hamburger Hafen & Logistik AG, which handles three out of four containers passing through Germany’s biggest port, is closely monitoring the situation, spokesman Torsten Engelhardt said by phone, declining to elaborate.
All companies involved in serving Hanjin vessels, such as fuel and food suppliers, will most likely demand advance payments and guarantees before continuing cooperation, Seydlitz-Kurzbach said. On the other hand, Hanjin’s large clients will want to avoid a complete collapse of the company and “are keen to get their cargo off the ships ahead of the Christmas season,” said Seydlitz-Kurzbach. “Given the mutual interests, Hanjin may as well seek the support of large clients.”
Hanjin also filed for Chapter 15 bankruptcy protection on Sept. 2 at the U.S. Bankruptcy Court in Newark, New Jersey.
For U.S. retailers, Hanjin’s filing brings concerns about products’ arrival in time for the Thanksgiving-to-Christmas shopping period. Goods sail about 10 days to reach Los Angeles from Asia, and take as many as 30 days to Rotterdam.
Store chains are working to minimize delivery disruptions from cargo waiting to depart Asia, traveling by sea or arriving at ports, Jonathan Gold, vice president for supply chain and customs policy at the Washington-based National Retail Federation trade group, said last week.