Ailing shipper moves to resolve chaos
SEOUL, South Korea — Financially troubled Hanjin Shipping Co. will seek stay orders in dozens of countries this week to help minimize disruptions caused by its slide into bankruptcy proceedings, the Financial Services Commission said Monday.
Hanjin, the country’s largest ocean container shipper, will seek bankruptcy protection in 43 countries, including Canada, Germany and Britain, FSC officials said.
The measure is aimed at “minimizing the cases where Hanjin Shipping’s vessels are being seized in foreign countries,” South Korea’s government said in a statement jointly released by several ministries including the FSC. Hanjin said last week that one ship had been seized by its owner in Singapore.
South Korea will ask each country to expedite the “Stay Order” process, it said.
Hanjin sought bankruptcy protection in the U.S. and South Korea last week.
A company spokeswoman, Park Eun-hye, confirmed Hanjin was moving to protect its assets but refused to specify in how many countries, beyond the U.S. and South Korea. She said Hanjin would release an update on the number of ships being held by creditors later Monday.
With its assets frozen, its ships are being refused permission to offload or take on containers at ports worldwide, out of concern tugboat pilots or stevedores wouldn’t be paid. Hanjin said that out of 141 vessels it operates, 68 were not operating normally, were stranded or seized, as of Sunday.
The South Korean giant represents nearly 8 percent of the trans-Pacific trade volume for the U.S. market, and with Hanjin’s container ships marooned offshore, major retailers were scrambling to work out contingency plans to get their merchandise into stores.
Hanjin, the world’s seventh largest ocean shipper, is part of the Seoul-based Hanjin Group, a huge, family-dominated conglomerate, or chaebol, that also includes Korean Air.
Global demand and trade have suffered since the 2008 recession, but shipping lines continued to build more and larger vessels. That weaker trade and overcapacity have sent ocean shipping rates plunging in recent years.