Han­jin bank­ruptcy causes global ship­ping chaos, re­tail fears

Baltimore Sun - - MARYLAND - By Robert Jablon Bal­ti­more Sun re­porter Sarah Gantz and As­so­ci­ated Press busi­ness writer Youkyung Lee in Seoul con­trib­uted to this ar­ti­cle.

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.”

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