This week, financially troubled shipping line Hanjin filed for court receivership after the state-operated Korea Development Bank (KDB) and other creditors declined to extend new loans to the company. KDB also rejected Hanjin’s liquidity plan, determining the plan was not viable enough to keep the company operating.
On Sept. 1, a local court in Korea approved placing Hanjin’s filing under court receivership. While this allowed Hanjin to avoid liquidation, its financial situation is causing shipping disruptions on many trade routes, which represent a growing concern for U.S. exporters. The disruptions extend beyond shipments actually being handled by a Hanjin vessel, as the company is part of the CKYHE Alliance that also includes COSCO Container Lines, “K” Line, Yang Ming Marine Transport and Evergreen Line. Port congestion could also cause delays for shipments in which Hanjin is not involved in any manner, which is particularly concerning for exporters moving chilled product.
U.S. media coverage of the Hanjin situation has mainly focused on the backlog of inbound shipments attempting to reach West Coast ports. But if inbound vessels continue to encounter delays entering U.S. ports, this congestion will also affect vessel availability for outbound shipments.
The Federal Maritime Commission released a statement Thursday saying it had limited jurisdiction over this matter but warned that it would be “quick to act” on any improper behavior by other carriers seeking to capitalize on this situation.
USMEF is in the process of gathering information from its international directors and staff regarding the impact on port traffic in their markets, deposits required on shipping containers and other related issues. We will share more information on this situation as these details become available. If you have questions or have information to share about shipping delays or issues, please contact the USMEF Technical Services Department.