Uncertainty regarding stranded Hanjin ships delays modal shift to air

At least US$182 million is on hand to bail out the bankrupt Korea-based shipping company Hanjin, yet, three weeks into its collapse, billions of dollars of inventory remain stranded at sea on the brink of this year’s peak season.

On Aug. 31, one day after creditors pulled support for Hanjin, the shipping company filed for court receivership, sending shockwaves through the freight industry. Given the complexity of the situation, any resolution will require the Korean government and parent company, Hanjin Group, to agree on a deal that would revive the company. Until then, many of Hanjin’s cargo vessels are lingering offshore for fear of being seized by creditors if they enter their destination ports.

For shippers, forwarders and customers on the receiving end, the continued uncertainty is, so far, preempting a rush to alternate modes of transportation, as stakeholders wait for a resolution. As of last week, one cargo carrier told ACW that it had not seen an uptick in business as a result of the bankruptcy.

A U.S.-based judge ruled in favor of temporary bankruptcy protection for Hanjin, allowing its ships to doc. However, ports, cargo handlers, truckers and railways have refused to touch Hanjin’s containers without payment on the horizon. Samsung currently has US$38 million worth of goods on ships at Long Beach that have not yet been released, threatening Apple’s plans to steamroll the market place with the release of its new iPhone during the holiday season.

At least one ship, the Hanjin Montevideo, has already been seized by U.S. marshals, according to local media in Long Beach. A local fuel supplier has claimed outstanding debt of US$775,000. A second vessel originally bound for Long Beach has left U.S. waters for Mexico.

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