The chaos surrounding the receivership of Hanjin Shipping, container shipping’s largest ever bankruptcy, continues to plague shippers around the world with around $14bn of goods left stranded out at sea.
Irate shippers in South Korea are demanding greater transparency from the blighted line on the whereabouts of their stuck shipments.
“Local trading companies that loaded their cargo on Hanjin ships have not been able to figure out the ‘whereabouts’ of their freight. Hanjin Shipping must promptly provide transparent information about the sailing information of the vessels that are abnormally running, cargo information and other relevant information,” the Korean Shippers’ Council said in a statement today.
A judge in the US has granted the Korean line bankruptcy protection, so creditors will not be able to seize its assets for the time being. However, the judge, John Sherwood, did not provide any measures to ensure all the cargoes on the line’s stranded ships could be offloaded.
“The logistical issues here are pretty substantial,” Judge Sherwood said at Hanjin’s debut appearance at the US Bankruptcy Court. “There’s a lot of manpower, time and expense that goes into bringing a cargo ship into port and unloading it.”
Hanjin officials have picked the ports of Los Angeles, Singapore and Hamburg as destinations to eventually offload cargoes overseas and Busan and Gwangyang ports on home soil.
Hanjin’s parent, Hanjin Group, has promised to spend KRW100bn ($90m) to get the stranded boxes back on terra firma, a figure the government in Seoul have agreed to match.
However, much more money is urgently needed. The South Korean court tasked with overseeing Hanjin’s rehabilitation process has demanded lead creditor Korea Development Bank (KDB) pump in more funds to try to get the line back on track.
“All we can do is assure that the company is working around the clock to raise the financing to pay people and to start moving the cargo and to do what’s necessary for our customers,” the lawyer appointed by Hanjin in the US said yesterday.
Among shippers put out by Hanjin’s demise is Samsung Electronics which has around $38m worth of cargo sitting on Hanjin ships in international waters. The tech giant is mulling chartering 16 freighter planes to fulfill shipment contracts, principally to the US.
“We’re passengers on a bus, and we’re being told we can’t get off,” said Evan Jones, a lawyer for Samsung, told the Wall Street Journal.
Meanwhile, concern is mounting for Hanjin workers both at sea and at offices around the world. It has been a week since the line folded – and since then around 70 ships have remained rooted in international waters to avoid being arrested by creditors.
“Our ships can become ghost ships,” Kim Ho Kyung, a manager at Hanjin Shipping’s labour union told Bloomberg today. “Food and water are running down in those ships floating in international waters.”
Reports are also emerging of violent repercussions aimed at Hanjin employees by disgruntled customers and contractors at its offices around the world.
The share price of Hanjin Shipping spiked in early trading this morning, shooting up more than 15%, as speculation mounted that either Maersk or MSC, founding members of the 2M alliance, would come in and buy assets of the stricken line. Maersk has in the past denied such speculation. Hyundai Merchant Marine (HMM), a fellow Korean line, has also been tipped to take over certain Hanjin assets. HMM is joining 2M next year.
Splash has been leading the way with coverage of the decline and fall of Hanjin Shipping – for our full archive on 2016’s biggest maritime story, click here.
My thoughts are obviously with the employee’s of Hanjin Shipping, their shippers and receivers but amid all this chaos I hope that the shippers, receivers and the end customers realise the importance of liner shipping to the world economy and keep this in mind when hammering down the box and shipment costs which are an absolute miniscule fraction of the final price to the end consumer. And on the flip side I hope those liner companies whose pricing strategy seems to have no economic rational and impacts on other liner companies pricing get a wake up call !
Well said, Mark!
Well Korea Development Bank, (KDB), On August 31, 2016, Forced Korea #1 Container Carrier, Hanjin Contaner Lines, Into Filing Bankruptcy, By Not Supporting Hanjin Shipping, Re-Structure Plan, If it had, This Splash 24/7.com Article, Would not of been printed, and Everyone, Would have their cargoes in timely manner. Now The Korea Judge in Hanjin Shipping Bankruptcy, is Demanding, That Korea Development Bank, (KDB) Chips in a Sufficient Funds to Balance Hanjin on Even Keel. Hanjin, CEO, Had already announced in numerous Publication on September 6, 2016, They Were earmarking funds to get Ships, Crew, & Officers, Food, Fuel, & Their Paychecks. Once All their Ships are Fully Secured Hanjin Ships & Containers from being putting under arrest. This is normal thing to do in any global bankruptcy. Everyone, should try this sometimes, It is eye opener, Like Hanjin, Their is a process that need to be done first, So Everyone quit your crying. You will get your Cargoes in timely manner, Hanjin is well aware of your timely concerns, I, be willing to say, these cargoes will Be available Sooner, Then Later, Within The Next Seven (7) days From now, As, soon as All The finances is in place. Right now, South Korea Government is matching Hanjin $90M Plus, To get All Hanjin Ships to These Specific Ports of Calls: Los Angles, California, USA, Singapore, Malaysia, Hamburg, Germany, Busan & Gwanguang, South Korea. All of Hanjin Ships, Sitting in Neutral waters to avoid arrest, Which Past Shipping Companies, & Its Charters, Have done, So this is Nothing New. Funny thing is: All you people, Freight Forwarders, Shipping Agents, Bunkers Suppliers, Cargo Clients, Stevedores, Ports, Banks, You All Knew this Was Coming, and Yet, None of You Did Nothing To Prepare Yourself For It, So you are as Guilty, As Anyone!
My thoughts are with retailers whose shelves may be under stocked this fall season, because of shipments arriving in the wrong season, and resulting in less sales and lower quarterly earnings.