Judge gives temporary OK to protect Hanjin Shipping in US

The bankruptcy last week of Hanjin, the world’s seventh-largest container carrier, is having a big ripple effect on furniture importers stateside.

Almost a week after Hanjin Shipping Co went bust, the largest shipping company ever to do so, relief could be in sight for retailers, exporters and workers at Southern California ports.

On the surface, the bankruptcy fate of a South Korean shipping company doesn’t look like it would be more than a minor blip on the radar of the overall US economy.

“Our ships can become ghost ships”, Kim Ho Kyung, a manager at Hanjin Shipping’s labor union, told Bloomberg. “Food and water are running down in those ships floating in worldwide waters”.

The South Korean giant represents almost eight per cent of the trans-Pacific trade volume for the USA market.

Out of the 100 billion won, Hanjin Group Chairman Cho Yang-ho will raise 40 billion won from private funds next week.

Hanjin Shipping filed for bankruptcy protection last week after its proposal for restructuring failed to pass muster with lenders led by state-owned Korea Development Bank.

Earlier, the company received authority to spend the money needed to dock at US ports and begin unloading four vessels that have been stranded at sea by the company’s failure last week, a company lawyer told a USA court on Friday.

Hanjin Shipping shares have tumbled 63 percent this year, compared with a 5.4 percent gain in the benchmark Kospi index. Four vessels have also been seized as of Thursday, according to Hanjin Shipping.

“It will most likely be used to pay fees to unload stranded cargo going forward”. Sherwood said he would sign the order later on Friday. There should be measures to secure the safety of sailors, he said, adding they don’t know how long they should wait at sea. “U.S. bound cargo is already being delayed at origin ports and Hanjin ships loaded with cargo idle unable to enter USA ports, containers are being detained on arrival clogging already congested ports and preventing merchandise from reaching store shelves”, Retail Industry Leaders Association President Sandra Kennedy said in a letter last week to Commerce Secretary Penny Pritzker and Federal Maritime Commission Chairman. “These ships need to be unloaded – each day that they sit there our local workers and businesses lose money”. About US$38 million worth of Samsung products, including finished products and parts, are being held on the vessels.

A judge in New Jersey has issued an order that is moving Hanjin cargo around the continent. And though the holidays are still several months away, September is considered a crucial month in the shipping world, as companies are preparing to meet seasonal demand.

Industry analysts expect the freight rate increases to be short- lived as more shipping capacity comes on line. The company handles an estimated 7.8% of trans-Pacific freight destined for the U.S.