Dive Brief:

• Workers continue to unload cargo from bankrupt Hanjin Shipping Co.’s vessels, somewhat easing fears that merchandise needed for retailers' all-important holiday shopping season would be left stranded on ships or at ports.

• At this point, 28 vessels from Hanjin’s worldwide fleet of 97 container ships have offloaded their cargo, according to the Wall Street Journal. A Hanjin spokesperson said the company and the South Korean government are negotiating with port authorities in New York, Singapore and Manzanillo, Mexico to start unloading more cargo this week. Some 34 cargo-laden ships are still at sea, and 35 ships are headed back to South Korea, although it’s not clear whether the latter group still carries cargo.

• While support for Hanjin is coming from major shareholder Korean Air Lines, the South Korean government and bankruptcy protections, analysts say the company (the world’s seventh largest ocean shipper by capacity) is likely to be eventually liquidated.

Dive Insight:

Hanjin filed for bankruptcy in late August, spiking logistics costs and stoking fears among retailers who began to scramble to find ways to get needed merchandise from Asian suppliers. 

Hanjin has some 60 regular lines worldwide and annually moves more than 100 million tons of cargo. It is part of an alliance of six shipping companies, which complicates the problem even further. Plus, trucking and railroad companies (especially those heavily dependent on moving the shipper’s cargo from U.S. ports) are wary of entering the fray for fear they may not be compensated for their efforts. Hanjin is working to assuage those concerns, in part by paying dock worker wages upfront.

“Retailers’ main concern is that there is millions of dollars worth of merchandise that needs to be on store shelves that could be impacted by this,” National Retail Federation Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement earlier this month. “It is understandable that port terminal operators, railroads, trucking companies and others don’t want to do work for Hanjin if they are concerned they won’t get paid. However, we need all parties to work together to find solutions to move this cargo so it does not have a broader impact on the economy.” 

Another trade group, the Retail Industry Leaders Association, wrote a letter to the U.S. Department of Commerce and the Federal Maritime Commission asking the federal government to step in to help smooth out the Hanjin situation and expressing hope that the South Korean government will also work to clarify and speed up bankruptcy proceedings.

“There’s going to be exorbitant costs,” Peter Schneider, vice president of California-based T.G.S. Transportation, told the Wall Street Journal earlier this month. “Everything is unraveling.” T.G.S. has some $7,000 in outstanding bills to Hanjin, which Schneider said he will likely write off, but added that smaller trucking companies that “had all their eggs in one basket with Hanjin... may go under.”