12 THE JOURNAL OF COMMERCE www.joc.com SEPTEMBER 19.2016
COVER STORY
Hanjin, the largest ocean carrier to col-
lapse in the 60-year history of container
shipping, is undergoing Korean court reha-
bilitation, where debts to creditors can be
restructured with the aim of protecting the
shipping company while it trades its way out
of debt. Even if in the unlikely event the car-
rier is able to trade its way back to financial
health, it won't be a swift process. The court
has called for claims against Hanjin to be sub-
mitted between Sept. 20 and Oct. 4 and the
receiver is scheduled to report his decisions
to the court on Nov. 11.
Hanjin Group plans to spend $90.7 mil-
lion to unload containers from company
vessels that have been stranded worldwide,
and Hyundai Merchant Marine, South
Korea's second ocean carrier, will provide
13 replacement ships to substitute vessels
affected by Hanjin's receivership applica-
tion. 2M Alliance partners Maersk Line
and Mediterranean Shipping Co., along with
CMA CGM, which just completed its take-
over of APL parent company NOL, plan to
deploy so-called extra loader vessels to pick
up Asian cargo Hanjin has left up for grabs.
The 2M also will start two trans-Pacific ser-
vices to help fill the Hanjin void.
That's little comfort to shippers whose
containerized supply chains already have
been disrupted through the stranding of
Hanjin vessels outside of US ports because
of fear of arrest. With the granting of Chap-
ter 15 in the United States, those ships will
be able to call US ports and marine termi-
nals, but there's no guarantee they will be
worked.
Hanjin is scrambling to seek the
same bankruptcy protection in other coun-
tries after its containers ships were seized in
Australia, Singapore and China.
As of Sept. 6, nearly 100 companies were
working to recover expenses from Hanjin or
retrieve stranded cargo via US bankruptcy
courts. Potential creditors include Nike,
four of the top seven Class I railroads in
North America, a slew of major state port
authorities and private terminals, as well as
Japanese ocean carrier "K" Line.
According to Korea's Maritime Minis-
try, 61 Hanjin container ships and 18 bulk
carriers
have been refused entry to ports
around the world. IHS AISLive satellite
ship-tracking data, cross-checked against
global shipping schedules and individual
vessel data, showed that, as of Sept. 6, more
than 49 Hanjin Shipping vessels weren't
where they should have been.
A global shipper of household goods
moving from Asia to Europe said he had
800 TEUs affected by the Hanjin collapse
that were at various stages of the supply
chain. "Some are gated in and are now
going to be a nightmare to get out, restuffed
and rebooked, especially in China. That's
the biggest headache I've got," he told The
Journal of Commerce.
Even when marine terminals work their
cargo, shippers still must pay for their cargo
release from transportation providers, rang-
ing from terminal operators to railroads.
Those releases don't come cheap. One motor
carrier told The Journal of Commerce that
he had to pay $395.20 per container to cover
stevedoring charges before he could remove
a Hanjin box from a Port of New York and
New Jersey terminal.
Rising trans-Pacific and Asia-Europe
spot rates could spur container lines to roll —
or push to later sailings — contracted cargo
in favor of more profitable spot cargo. Ship-
pers also should be wary of dubious fees tied
to Hanjin's bankruptcy.
"Yesterday I could get a Hanjin con-
tainer out of a European port by only paying
the terminal handling charges," the supply
chain director of a major German shipper
said in late August. "Then last night another
Europe terminal guy demanded to be paid
for the ship mooring, the lashings, putting
the boxes in a stack, the bunkers, and all the
sort of things Hanjin would normally pay
for. It went up from 300 euros ($334) to 800
euros ($892) overnight."
European shippers and freight forward-
ers are stepping up efforts to stop ports and
terminals from demanding excessive fees
to release containers unloaded from Hanjin
vessels. Dutch shippers and forwarders on
Sept. 2 won a legal action against ECT, a
leading Rotterdam terminal operator that
levied a release fee of 1,000 euros ($1,120) for
a standard dry container and 1,500 euros for
reefer and tank containers. The court ruled
the fixed fees were unlawful, and ECT could
only charge the normal handling fee, plus a
25-euro surcharge.
In the US, maritime regulators, are urg-
ing shippers to report any unreasonable
increases in cost or decreases in service
tied to Hanjin's bankruptcy. Although it has
limited ability to help US shippers with the
fallout from Hanjin's bankruptcy because it's
not a US legal matter, the Federal Maritime
Commission said it will continue to enforce
the Shipping Act of 1984, which protects ship-
pers from such unreasonable practices.
The commission will be vigilant in
watching for, and quick to act on, any
improper behavior by other carriers and
regulated parties (such as marine terminal
operators, non-vessel-operating common
carriers, and freight forwarders) that would
constitute violations of the Shipping Act,"
the FMC said in a statement.
The FMC added that it has no author-
ity to resolve bankruptcy claims, so it won't
intercede in actions between third parties
and the court. The FMC, however, is con-
cerned about how Hanjin's bankruptcy will
affect US supply chains and container ship-
ping competition, and will be monitoring
how the US shipping industry is affected.
Hanjin-related disruptions are moving
inland, as NVOCCs, shippers, warehouse
operators, and truckers sort out how and
when shipments will be released and moved
to distribution points and customers. "There's
definitely a domino effect," said a Midwest-
ern third-party logistics operator and NVO,
who requested anonymity. The company,
which deconsolidates and transloads con-
tainers for retail clients, was scrambling to
locate freight carried by Hanjin.
Some railroads reportedly were refusing
EUROPEAN SHIPPERS AND FREIGHT FORWARDERS
ARE STEPPING UP EFFORTS TO STOP PORTS
AND TERMINALS FROM DEMANDING EXCESSIVE FEES
TO RELEASE CONTAINERS UNLOADED FROM HANJIN VESSELS.
