Shipper’s woes worry retailers
NEW YORK — Some major retailers are scrambling to work out contingency plans to get their merchandise to stores as the bankruptcy of the Hanjin shipping line has thrown ports and retailers around the world into confusion.
They don’t have a lot of time. Giant container ships from the South Korean based Hanjin shipping line are marooned with their cargo of what experts say are lots of TVs and printers, but also loads of home furnishings and clothing.
Hanjin, the world’s seventh-largest container shipper, filed for bankruptcy protection Wednesday and stopped accepting new cargo. With its assets being frozen, ships from China to Canada were refused permission to offload or take aboard containers because there were no guarantees that tugboat pilots or stevedores would be paid. It’s also been a factor in shipping rates rising and could hurt some trucking firms with contracts to pick up goods from Hanjin ships.
Trans-Pacific trade
The South Korean giant represents nearly 8 percent of the trans-Pacific trade volume fort he U.S. market. While some retailers may already have merchandise for the holiday season affected, experts say what’s most important is that the issue be resolved before the critical shipping month of October.
“Retailers always have robust contingency plans, but this degree of uncertainty is making it challenging to put those plans in place,” said Jessica Dankert, senior director of retail operations for the Retail Industry Leaders Association, a trade alliance with members including companies like Best Buy, Wal-Mart and Target.
J.C. Penney said Hanjin is one of several ocean freight carriers that it uses and when it learned there might be an issue it began to divert and reroute its containers.
Target said it is watching the situation closely and Wal-Mart said it is waiting for details about Hanjin’s bankruptcy.
As of Friday, 27 ships had been refused entry to ports or terminals, said Hanjin Shipping spokesman Park Min.
The Seoul-based company said one ship in Singapore had been seized by the ship’s owner.
The Retail Industry Leaders 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.
Affecting truckers?
The confusion might also sink some trucking firms that contract with Hanjin. “They’ve got bills to pay — they could literally close their doors over this,” said Peter Schneider, Fresno-based vice president of T.G.S. Transportation.
Other shipping lines may take on some of Hanjin’s traffic — but at a price. Since many vessels already are operating at high capacity, shippers may wind up paying a premium.