Hanjin Group to Provide $90 Million in Aid to Shipping Line
Of the funds from Hanjin Group, 40 billion won will come from Chairman Cho Yang Ho, the group said in an e-mailed statement Sept. 6. Separately, South Korea’s ruling Saenuri Party asked the government to offer about 100 billion won of loans at a low interest rate to the container line if Hanjin Group provides collateral, Saenuri lawmaker Kim Gwang Lim said in a statement.
South Korea’s Ministry of Oceans and Fisheries estimates Hanjin needs more than 600 billion won for unpaid costs such as fuel, including about 100 billion won immediately for payments to port operators to unload cargo from stranded ships, Kim said in the statement. After last week’s receivership filing, Hanjin Shipping’s vessels and their goods have been left in limbo as port operators refused work pending payment, roiling customers’ supply chains before the year-end shopping season.
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Hanjin ranks No. 23 on the Transport Topics Top 50 list of the largest global freight carriers.
“The government is trying to extinguish the most immediate fire” to help ease some supply chain bottlenecks, Kim Tae Il, a research analyst at the Korea Maritime Institute in Busan, said Sept. 5. “So those toys held up in container boxes will be able find their way to consumers.”
Hanjin Group will raise the remaining 60 billion won using its stake in a terminal at Port of Long Beach and other assets as collateral.
Hanjin Group also said it will also help ease the supply chain disruptions by providing assistance in transporting goods through units. Hanjin Transportation Co. has set up a task force to help unload cargo from vessels and the group’s Korean Air Lines Co. also will consider moving cargo by air as an alternative way to easing the supply crunch.
Deputy Finance Minister Choi Sang Mok said Sept. 5 that South Korea’s largest container line is seeking stay orders in 43 countries to protect its vessels from being seized and will call at certain ports such as Hamburg and Singapore where they are deemed less likely to be stranded.
The nation’s Financial Supervisory Commission has said operations of 79 of Hanjin’s vessels, including 61 container ships, have been disrupted. Offloading the containers would help Hanjin Shipping’s clients, such as LG Electronics Inc., get their goods back on land and transported via other ships or by road to their customers.
“Given the vast amount of cargo and value remaining on the vessels, Hanjin’s administrators will have to do all they can to get the ships into ports, as they have to avoid additional claims against Hanjin for delays and possible damages,” said Harald von Seydlitz-Kurzbach, managing director at Bremen, Germany-based Reck & Co., which is part of the Lloyd’s Agency Network representing cargo interests in legal disputes.
Goods sail about 10 days to reach Los Angeles from Asia, and take as many as 30 days to Rotterdam.
Hanjin also filed for Chapter 15 bankruptcy protection on Sept. 2 at the U.S. Bankruptcy Court in Newark, New Jersey.
