Billions in cargo remain stranded at sea after Hanjin’s bankruptcy
Hanjin Shipping Co.'s financial and legal troubles have left as much as $14 billion worth of cargo stranded at sea, sending owners scrambling to try to recover their goods and get them to customers, according to industry executives, brokers, and cargo owners.
Samsung Electronics Co. said it has cargo valued at about $38 million stranded on Hanjin ships in international waters. "We're passengers on a bus, and we're being told we can't get off," said Evan Jones, a lawyer for Samsung, said Tuesday.
The tech giant said it is considering chartering 16 cargo planes to fulfill its shipment contracts, principally to the US
Since Hanjin, South Korea's largest shipping line and the world's seventhbiggest in terms of capacity, filed for bankruptcy protection in Korea last week, dozens of ships carrying more than half a million containers have been denied access to ports around the world. Some have been seized by creditors.
Though the shipping giant has been granted protection by bankruptcy courts in Korea and the US, "it's bordering chaos," said Lars Jensen, chief executive of SeaIntel Consulting in Copenhagen. "With so many Hanjin ships barred from entering ports, shippers have no idea when their cargo will be unloaded."
The courts' protection permits Hanjin ships to move in and out of terminals in those countries without fear of its assets being seized by creditors. But shippers and brokers say the rulings don't solve the shipping lines' problems in the US as it is unclear whether Hanjin will be able to afford to have the ships unloaded once the vessels are docked. Moreover, these rulings don't necessarily apply to ports in Asia and Europe.
Jensen said 43 Hanjin ships are en route to scheduled destinations with no guarantees that they'll be allowed to unload cargo. An additional 39 are circling or anchored outside ports. Eight ships have been seized by creditors.
As Hanjin ships drift at sea, their crews face increasing uncertainty and diminishing supplies.
"We usually have food and water for about two weeks," said the captain of a Hanjin-operated container ship speaking from satellite phone from the South China Sea.
But he has been at sea for 12 days "so everything is getting tight – food, water and fuel." He is rationing water and cutting back air conditioning to save energy. His ship was carrying lubricants and home appliances from South Asia to a Chinese port, but last Thursday, he was told to stop as the ship could be seized at the destination port.
"The heat is driving the crew crazy," he said. "Everyone is on edge. They worry about whether they will get paid and when are they going to see their families." About the future, he has been told only to "hang in there." Even if he were able to reach port, "there is no credit for Hanjin now," he said. "We don't have enough cash with us and the company is bankrupt. It is a big problem."
Adding to the confusion, shippers and brokers said the Korean government has designated only three socalled base ports -- Los Angeles, Singapore and Hamburg -- where Hanjin vessels can unload shipments without risk of seizure by creditors.
"Even in those ports, we don't know who is going to be paying unloading fees," a broker in Singapore said. "Korea says it will be Hanjin, but Hanjin is telling us it has no money. It's a total mess."