Dive Brief:
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Freight from a Hanjin Shipping Co. vessel was unloaded at a Long Beach, CA port Monday morning, setting the stage for more of the embattled company's ships to dock, the Wall Street Journal reports.
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Hanjin cargo has been stuck worldwide since the ocean shipping company filed for bankruptcy protection in South Korea late last month and in the U.S. earlier this month, setting off alarms throughout the shipping and retail industries.
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Some 13 ships owned or leased by Hanjin are preparing to unload cargo in U.S. ports, according to court papers cited by the Journal. Korean Air Lines Co., Hanjin’s flagship unit and largest shareholder, on Saturday agreed to lend the shipper 60 billion won ($54 million), part of an earlier agreement to put up 100 billion won.
Dive Insight:
The Hanjin situation is disrupting supply chains just as retailers are preparing for the all-important holiday shopping season.
The seventh-largest ocean shipper by capacity, 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: 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, and some 540,000 containers may see delivery delays ranging from a few days to more than a month, freight brokers in Asia said. Shipping rates have soared as a result.
“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,” NRF 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."
Gold admitted that there are more questions than answers at this point, but said retailers are working to address the matter, "working with all of their service providers to find ways to get their cargo moving to ensure that there is no or limited interruption in the supply of merchandise."
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.