Hanjin bankruptcy causes global shipping chaos, retail fears
The bankruptcy of the Hanjin shipping line, which is not a big player in Baltimore, has thrown many other ports and retailers around the world into confusion, with giant container ships marooned and merchants worrying whether tons of goods will reach their shelves.
The South Korean giant filed for bankruptcy protection Wednesday and stopped accepting new cargo. With its assets being frozen, ships from China to Canada were refused permission to unload or take aboard containers because there were no guarantees that tugboat pilots or stevedores would be paid.
“Hanjin called us and said: ‘We’re going bankrupt and we can’t pay any bills — so don’t bother asking,’ ” said J. Kip Louttit, executive director of the Marine Exchange of Southern California, which provides traffic control for the ports of Los Angeles and Long Beach, the nation’s busiest port complex.
Richard Scher, spokesman for the Maryland Port Administration, said Hanjin only serves Baltimore through a larger shipping alliance that calls at Seagirt Marine Terminal. So far this year, only 535 Hanjin containers crossed the docks at Seagirt, he said. Last year, the port handled nearly 600,000 containers.
As of Friday, 27 ships had been refused entry to ports or terminals, said Park Min, a spokeswoman for Seoul-based Hanjin Shipping. A Hanjin ship in Singapore also had been seized by the ship’s owner, but Min did not confirm any other seizures.
That left cargo headed to and from Asia in limbo.
“Someone from the garment industry called earlier today asking: ‘How long is this going to go on, because I’ve got clothing out there,’ ” Louttit said.
The National Retail Federation, the world’s largest retail trade association, wrote to U.S. Secretary of Commerce Penny Pritzker and Federal Maritime Commission Chairman Mario Cordero on Thursday, urging them to work with the South Korean government, ports and others to prevent disruptions.
The bankruptcy is having “a ripple effect throughout the global supply chain” that could cause significant harm to both consumers and the U.S. economy, the association wrote.
“Retailers’ main concern is that there [are] millions of dollars’ worth of merchandise that needs to be on store shelves that could be impacted by this,” said Jonathan Gold, the group’s vice president for supply chain and customs policy. “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.”