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Sept.19. 2016

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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.

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