Tuesday, September 13, 2016

Hanjin Container Line Collapse Angers Shippers as Charges Imposed Vessels Arrested

Confused Global Situation with Cargo Held as Some Money Arrives
Shipping News Feature
SOUTH KOREA – WORLDWIDE – The collapse of the container shipping line Hanjin has caused immense problems for shippers worldwide. Full details of the company’s demise has been detailed on previous stories but the fallout from the failure of the group continues. Hanjin owns 89 box ships and about half of them were on the water at the point the company asked the Court for protection from bankruptcy. Samsung alone are reported to have had almost $40 million worth of electronic goods in the care of Hanjin.

Consignee’s worldwide are in uproar, no matter what has been paid to Hanjin we have reports that even container terminals where the company was a major shareholder are refusing to offload the ships. In the UK some ports are charging after exercising their right of lien on the containers themselves. The Port of Felixstowe for example only has around 1,000 Hanjin boxes which have arrived via other shipping lines as part of a Vessel Sharing Agreement (VSA). Although not entitled to claim any authority over the goods themselves, Felixstowe is charging handling fees to the consignee together with a refundable deposit on the container to ensure this is not retained by the customer as surety against its own debts.

Charges levied worldwide fluctuate wildly, whilst Felixstowe is charging some importers a container handling fee of £460 per container rivals London Gateway charge just £130. The refundable deposit on the boxes also favours the Thames side deep water port with fees of £500 per 20 foot container and £700 on each 40 foot unit whilst the Suffolk port charges £2,000 as a flat fee.

There is no news release from Felixstowe’s owners HPH and the port has declined to issue an official statement whilst London Gateway’s parent group, DP World, has done so for all its global locations saying:

”Following Hanjin Shipping’s decision to file for court protection, we have been working with our customers and partners to minimise impact on world trade. The filing for receivership is still at an early stage and we note that the exact form of the proposed restructuring plan is still unknown. We recognise the importance of our role as global trade enabler to the supply chain, so while protecting our interests, our main focus is limiting any disruption to service for our customers to continue the smooth flow of goods across our global network."

This matter of containers bearing the Hanjin brand is one of the most serious issues. Many shippers assume that the name on the box indicates ownership but this is often rarely the case. One estimate put the number of Hanjin containers under lease agreements at 750,000 boxes. This is based on the statement of intermodal container lease group CAI International which has around 2% of its leased container stock with the Korean carrier which equates to 15,000 boxes of various types, and that this in turn represents just 2% of the Hanjin leased fleet.

Hanjin Group Chairman Cho Yang-ho has now transferred £36 million to finance the offloading of vessels, mainly funding the US ports such as Long Beach where the company part owns a terminal. Principal shareholder Korean Air is currently trying to raise around another $50 million which it has agreed, a plan approved by its board, but wants the share in that California terminal as collateral.

In Australia one vessel, the Hanjin California remains detained by the Courts in Sydney as Glencore Singapore sues for unpaid fuel bills, allegedly some A$430,000. Much of the ship’s cargo has been offloaded but she remains loaded with cargo for ports scheduled for later delivery in the rotation. Australia differs from most of the other major destinations in the there is no provision for protection against creditors and several more ships are scheduled to dock there in the coming days which, if they do tie up, are liable to be immediately detained.

For its part Hanjin is maintaining a Vessel Operating Status Page tracking all its ships on a day to day basis.