South Korea’s Hanjin Shipping, the world’s seventh-largest shipper, has been granted temporary bankruptcy protection in the U.S., USA Today reported. The bankruptcy could impact fastener shipping as well as the Christmas holidays.
The Wall Street Journal reported “as much as $14 billion worth of cargo stranded at sea, sending its owners scurrying to try to recover their goods and get them to customers, according to industry executives, brokers and cargo owners.”
“With its assets frozen, Hanjin, which handles about 8% of all U.S. cargo, is faced with its ships not being allowed to unload or take on cargo as dock workers and tugboat pilots are concerned about not being paid,” USA Today explained.
Hanjin filed for bankruptcy in South Korea last week and is seeking similar protection in multiple countries to prevent seizures of ships and cargo.
USA Today reported that “a ripple effect” could impact retailers for holiday shopping. Samsung is among the companies affected with about $24.5 million in visual display products and parts and $13.5 million in refrigerators and other appliances on two ships near Long Beach, according to USA Today.
In a bankruptcy court filing, Samsung Electronics CFO Jun Tae Ahn said the “upcoming months are critically important to retailers, particularly ahead of Black Friday and the holiday shopping season.”
Members of Congress and U.S. retailers reportedly have also sought support for Hanjin to temper the repercussions of the shipper’s dilemma.
“We are entering peak season — when the entire shipping industry must work together to get gifts on shelves for holiday shoppers — our priority should be getting these ships unloaded,” several U.S. House members of the Congressional Ports Caucus urged Secretary of Commerce Penny Pritzker in a letter. Several of the letter signers represent the Long Beach and Los Angeles ports.
“U.S. bound cargo is already being delayed at origin ports and Hanjin ships loaded with cargo idle unable to enter U.S. ports, containers are being detained on arrival clogging already congested ports and preventing merchandise from reaching store shelves,” Retail Industry Leaders Association President Sandra Kennedy said in a letter to Pritzker and Federal Maritime Commission Chairman Mario Cordero.
Splash, a shipping industry trade publication, reported Maersk Line and MSC are actively seeking the Hanjin business. Maersk is introducing service between Asia and the U.S. West Coast with the first sailing September 15.
“We are responding to increased demand in the transpacific,” Klaus Rud Sejling told Splash. “With supply chains disrupted, many customers are approaching us for transport solutions for their cargo. The TP1 service is a stable, long term solution to meet our customers’ needs.”
The Maersk six-vessel service will be calling Yantian, Shanghai, Busan and Los Angeles/Long Beach.
MSC is introducing transpacific service starting September 15. The new six-vessel service will call at Busan, Shanghai, Yantian, Prince Rupert, Busan.
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