Update on Hanjin Bankruptcy
Dear Valued Partners & Clients,
Sept 9, 2016 – Hanjin’s insolvency is having an unprecedented impact on the industry. The collapse of the 7th largest container carrier on the planet has left many unanswered and complex questions – not to mention a legal horror show that is only further complicated by the sheer global magnitude of the situation. Trans-Border understands that this is a complex and unique set of circumstances, and that many in the trading community are overwhelmingly concerned about the effects of Hanjin’s collapse on their cargo. We would like to reassure everyone that Trans-Border is continuing to work with its global partners and sources to fully comprehend and relay all up-to-date information as it becomes available.
In the interim, we would like to provide a quick overview of the facts known to date based on various reports from South Korea and within the US:
• Hanjin has accumulated a mammoth $5.4 billion in debts
• Issue pertains to cargo under the care and custody of Hanjin. That is, cargo loaded on a Hanjin vessel, or Hanjin containers loaded on alliance member vessel.
• Hanjin has sought Chapter 15 bankruptcy protection in the US. No movement of Hanjin ships at US ports are expected until the court rules on protection, possibly today/9th Sept. If approved, it would allow Hanjin vessels to dock at US ports, but it is not clear who will pay the terminals to work the vessels.
• Some US and global ports are refusing to work on vessels already docked, again in the fear that they will not get paid for their services.
• What are potential costs to get cargo released? This is unclear at this stage. There are reports that some foreign ports are charging the cargo owners directly with higher port tariffs to get their cargo. This of course has put pressure on certain types of cargoes and their owners, especially those that trade in perishable goods, etc.
• Timing of collapse has sent shock waves through the global community, especially since the peak shipping season is upon us. Analysts say approx. $15 billion worth of merchandise is under the care and custody of Hanjin Shipping.
Again, Trans-Border will continue to monitor the situation and relay all updates as they come through. Should you have any questions, please contact one of the below listed managers via email or by calling 800-493-9444 who will be able to assist accordingly.