World’s Seventh Largest Container Carrier Collapses
Hanjin Collapses
About $14 billion worth of sea cargo was stranded by the collapse of the seventh-largest container carrier in the world.
Basil Karatzas of the New York-based Karatzas Marine Advisors says Hanjin is reluctant to dock its ships in some of the world’s ports, fearing they will be seized by creditors.
Samsung said in the filing, “These losses will continue to escalate so long as the cargo aboard these ships remain unloaded”. Samsung seems concerned that if it cannot retrieve its goods soon, it might strain the supply chain ahead of the USA shopping season, including Black Friday in November.
Meanwhile, South Korean regulators said they are directing Hanjin Shipping vessels to unload cargoes in a few key ports, including in Singapore and Hamburg, Germany.
The Reaction to Collapse
The Hanjin Group said in a statement Tuesday that it will provide its stakes in overseas terminals, such as the one Hanjin operates in Long Beach, California, as collateral to borrow 60 billion won ($54 million).
South Korea’s government expects a ruling in Hanjin’s favor, said Kim Hyun-jung, an official at the foreign affairs ministry. “People are scrambling to find a carrier with space”, said Peter Friedmann, executive director of the Agriculture Transportation Coalition shipping industry group.
Hanjin Looks for a Bailout
The ships contain everything from computer parts to perishable food with numerous cargoes destined for the Christmas market in the United States and Europe. To this end, Hanjin Group Chairman Cho Yang-ho has agreed to provide 40 billion won (US$37 million) in private assets and for group affiliate Korean Air Lines to give Hanjin Shipping a loan of 60 billion won (US$55 million) backed by Hanjin assets.
Almost a week after Hanjin Shipping Co. filed for bankruptcy, three of the South Korean company’s vessels remained adrift or anchored Tuesday near the Los Angeles and Long Beach ports as the shipping line’s executives struggle hard to raise money to pay creditors.
Hanjin Files for Bankruptcy Protection
An American court temporarily approved Hanjin Shipping’s application for bankruptcy protection. The company filed for U.S. Chapter 15 bankruptcy Friday, asking the court to recognize bankruptcy protections in South Korea, where it filed for receivership last Wednesday.
