Hanjin sinks in sea of red ink causing chaos

By: Rob McKay

Containerline’s running aground injects uncertainty into global supply chains

Hanjin sinks in sea of red ink causing chaos
Containerline Hanjin’s failure is having a worldwide impact


The failure of South Korean international containerline Hanjin is having an effect in Australia, as it is elsewhere in the world.

Formerly a big noise in global maritime transport, Hanjin filed for bankruptcy protection on Wednesday amidst reports that its business would be taken over by another Korean containership giant.

But in the meantime, ship running costs cannot be covered and dozens of vessels with thousands of containers are tied up in ports, about to be or not being allowed in, with a knock-on effect for customer supply chains and landside container transport and empty container park (ECP) operations.

Container Transport Alliance Australia (CTAA) reports that empty container parks are "taking varying operational approaches to dealing with the situation", with business rules being adapted depending on the changing circumstances in each ECP.

"Container transport operators are advised to individual ECPs to confirm arrangements prior to directing trucks to any particular park."

The containership Hanjin California, capable of carrying 3,600 containers and possibly not far off that due to this being the start of the busy trade season, is currently off Port Botany.

It was expected at the Hutchison terminal, CTAA says, with NSW Ports telling ATN it is scheduled to arrive in port tomorrow evening.

CTAA has advised those expecting to handle its containers to await developments.

Of the other stevedores, little impact is expected.

DP World Australia foresees no immediate change.

"The most important thing for us is that customers get their goods, so we will continue to handle Hanjin ships," DP World Australia chief commercial officer Brian Gillespie says.

Stevedore Patrick says that Hanjin is a "very small customer and while it is early days we expect any effects to be marginal to Patrick".  

But the story is more serious in the northern hemisphere, where cargo and empty containers are in limbo and ships are being turned away from ports.

The failure of the world’s seventh biggest containerline, one that controls nearly a tenth of transpacific trade, has the US National Retail Federation (NRF), the world’s largest retail trade body urging Washington to liaise with Seoul to minimise disruption, particularly in ports and reports that US trucking might suffer due to cancelled haulage contracts.

"Retailers’ main concern is that there is millions of dollars’ worth of merchandise that needs to be on store shelves that could be impacted by this," NRF vice president for supply chain and customs policy Jonathan Gold says. 

"Some of it is sitting in Asia waiting to be loaded on ships, some is already aboard ships out on the ocean and some is sitting on US docks waiting to be picked up.

"It is understandable that port terminal operators, railroads, trucking companies and others don’t want to do work for Hanjin if they are concerned they won’t get paid. 

"However, we need all parties to work together to find solutions to move this cargo so it does not have a broader impact on the economy."

"There are more questions than answers at this point, but retailers are working to get all issues addressed.

"Retailers are working with all of their service providers to find ways to get their cargo moving to ensure that there is no or limited interruption in the supply of merchandise."

In China, there are reports of creditors seizing Hanjin ships in lieu of payment.

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