Frazer Hunt, a partner at Australian law firm Mills Oakley, taps The Eagles in charting the chaos sparked by the bankruptcy of South Korea’s largest shipping line.
As we enter the third week following Hanjin Shipping filing for receivership, let’s review how the various stakeholders handled the fallout following arrest of Hanjin California in Sydney and whether there are any lessons to be learned before further containers are discharged from Hanjin Milano which remains anchored off Melbourne awaiting advice from Korea.
“So I called up the Captain…”
Hanjin California was arrested by unpaid bunker suppliers earlier this month after it berthed at SICT. The terminal discharged some of the containers and since Hanjin would not be paying any of the charges, exercised a lien over the containers for the stevedoring costs and administration charges. Consignees who had already paid freight were also required to pay these charges to obtain release of their containers. Still, if you wanted your container…
Then it got a lot more complicated: to secure return of container to the depot, Hanjin also required a deposit, bond or a solicitors letter of undertaking that the deposit would be paid on demand.
For a short period, the terminal also required security for the return of the container. Consignees were then faced with the dilemma that if they returned the container to Hanjin’s depot, they would lose their security to the terminal but if they returned the container to the terminal, then they would lose the security provided to Hanjin. Fortunately, common sense quickly prevailed and the terminal withdrew their parallel demand.
“What a nice surprise (what a nice surprise)… bring your alibis…”
Then the port authority got in on the act and asked the consignees to pay the wharfage costs that would have otherwise been paid by the vessel.
“There were voices down the corridor, I thought I heard them say… Welcome to the Hanjin California…”
Oh, your container holds dangerous goods? While grappling with the delays associated with the procedures referred to above and getting Hanjin to answer the phone, you are then served with a notice from the port authority to remove the container and threatened with penalties if it is not removed immediately. The notice then continued “You are invited to present information on any difficulties encountered in complying with the permitted time periods on the terminal which may be taken into account by the port authority when making a determination for the above alleged offence”.
“Mirrors on the ceiling, the pink champagne on ice…”
OK, so you have finally paid the stevedoring charges, wharfage costs and provided security for the return of the container and then picked up the container having also paid multiple fees for missed slots. Great, you now have your goods but: Hanjin’s container depots refused to accept re-delivery of Hanjin containers, presumably fearing that they would never be collected. You are asked to hold onto the container until further notice, presumably without further container demurrage accruing… hopefully…
“…Plenty of room at the Hanjin California”
In one sense, the consignees who got their containers out of the terminal were lucky – you have to feel sorry for the owners of goods in the Hanjin containers which were bundled up at the terminal and loaded on Hanjin California which remains under arrest at Glebe Island terminal that does not have facilities to load and unload containers with no appearance from the owners of the vessel in the arrest proceedings at this stage. Consignees who wish to have their containers discharged from Hanjin California will have to wait or apply to court to have their containers unloaded. Whether the costs associated with moving the vessel again for that purpose will be economically viable is another matter.
“Relax,” said the night man, “we are programmed to receive. You can check-out any time you like, but you can never leave!”
Meanwhile, the residents near Glebe Island Terminal are not happy – it is most inconvenient for them to have to pull the shades down on their windows.
Up ahead in the distance, I saw a shimmering light….
Seriously, you cannot make this stuff up!
Hopefully, the service providers at other ports will learn from our experience and that procedures for the release of the remaining Hanjin containers will be more streamlined and with less angst.
And I was thinking to myself, “This could be Heaven or this could be Hell”