The bankruptcy of the Hanjin shipping company, announced last Wednesday, plunged into confusion port authorities and retailers worldwide. Since Sunday, more than 79 giant cargo ships out of 141 are either blocked, seized or not functioning normally leaving the merchants into nothingness whether tons of goods will reach their shelves.
Since Wednesday, the South Korean giant filed for bankruptcy protection and stopped accepting new merchandise. Its assets being frozen, ships from to Canada were refused permission to offload or take aboard containers because there were no guarantees that tugboat pilots or stevedores would be paid.
Hanjin plans to file a petition in court in about 10 countries, including Canada, Germany and the UK this week, and later to extend this request to 43 jurisdictions to ensure that its vessels and other assets will not be seized by creditors, declared Monday the South Korea’s Financial Services Commission.
Hanjin’s financial issues will affect Canada’s freight industry, Ruth Snowden, executive director of the Canadian International Freight Forwarders Association, to the AP.
“It impacts Canadian importers and exporters because if I have a container on that vessel I can’t get it,” she said.
Since 27 August, the ships have been denied access to ports and terminals.
That left cargo headed to and from Asia in limbo, much to the distress of merchants looking to stock shelves with fall fashions or Christmas toys. “Someone from the garment industry called earlier today asking: `How long is this going to go on, because I’ve got clothing out there,’ said J. Kip Louttit, executive director of the Marine Exchange of Southern California.
In the US, retailers are concerned mainly by the fact that there are millions of dollars of merchandise that should be on store shelves, but their arrival is affected by this bankruptcy.
Hanjin Shipping is the seventh largest ocean carrier and part of Hanjin Group, a huge South Korean conglomerate owned mainly by the Cho Yang-ho family. Hanjin Shipping has been losing money for several years.