With claims against bust containerline Hanjin Shipping flying in and its ships around the world facing arrest, the South Korean legal system is moving into top gear to protect the endangered company.
Saddled by $4.2bn of debts, Hanjin Shipping filed for court receivership on Wednesday amid reports of ship arrests and ports refusing entry to the line. However, Reuters is now reporting that a Seoul Central District Court judge will kickstart rehabilitation proceedings as early as this week so that the line can engage in legal action in jurisdictions outside South Korea to keep its ships and other assets from being seized.
“We’re not considering liquidation at all,” the judge told Reuters.
Ports across the world have blocked Hanjin ships in the past 36 hours while one ship, the Hanjin Rome, has been arrested in Singapore and others are likely to be detained soon.
Authorities in South Korea have said today compatriot line Hyundai Merchant Marine (HMM) will deploy 13 ships on two Hanjin routes to take up some of the slack by the court receivership move. HMM and Hanjin, however, are in different container alliances.
Shaken alliance members of Hanjin’s have also scrambled in the past 24 hours to issue contingency notices to clients, trying to calm shipper fears over a major supply chain disruption in peak season.
Hanjin belongs to the CKYHE alliance, whose other members include Cosco, K Line, Yang Ming and Evergreen. The alliance is set to run until the end of March next year.
Evergreen has issued a notice to shippers saying that none of its cargo will be loaded onto any Hanjin ship and vice versa. Cosco, meanwhile, has told customers it is doing all it can to find solutions to its boxes already loaded on stranded Hanjin ships.
“With regard to the cargo already shipped or to be shipped, we will do our utmost to take care and execute our liability of custody so as to avoid any possible obstacles to shipping and prevent both of us from the negative influence,” Cosco said.
Spot freight rates out of South Korea have soared in the past 24 hours following the chaos brought by Hanjin’s demise.
One source at container analysts Alphaliner warned: “A chaotic situation is expected.”
Splash will be providing continued updates on the Hanjin upheaval. To view our full archive on container shipping’s largest ever bankruptcy, click here.