Hanjin Unloads More Cargo, Easing Supply-Chain Fears
Hanjin said 28 vessels have finished unloading goods at ports in California, Spain and other parts of the world
Containers are unloaded from the Hanjin Gdynia, berthed at the Port of Long Beach on Sept. 15. PHOTO: BLOOMBERG NEWS
SEOUL—The ships are starting to come in.
Nearly one-third of the Hanjin Shipping Co. container ships that have been waiting to dock around the world have unloaded their cargo, raising hopes that anxious retailers will get at least some of their goods in time for the crucial year-end holiday season.
South Korea’s largest container operator said Monday that 28 vessels from its container fleet of 97 ships have finished off-loading goods at ports in California, Spain and other parts of the world.
Hanjin spokeswoman Min Park said 34 cargo-laden ships remain stranded at sea, and 35 ships were headed back to South Korea. She could not say whether the 35 ships had unloaded their cargo, or were returning with undelivered loads.
Ms. Park added that the company was negotiating with port authorities in New York, Singapore and Manzanillo, Mexico, to start unloading additional cargo sometime this week.
“Both the company and the [South Korean] government are in talks with foreign authorities to solve much of the cargo crisis over the next few weeks and we’re making progress,” she said.
The stalemate marooned an estimated $14 billion in cargo at sea, much of it Asian merchandise destined for holiday shoppers in the West.Hanjin filed for bankruptcy in South Korea in late August, after amassing huge debt amid a prolonged industry slump. Since then, dozens of its ships carrying an estimated 500,000 containers have been blocked from ports amid questions about who would pay docking fees, container-storage bills and dockworkers’ wages.
Hanjin said it has managed to restart the off-loading process through court actions and, in some cases, by agreeing to pay dockworker wages up front.
The South Korean government said it was asking courts to protect Hanjin ships from being seized in Spain, Germany, the Netherlands, and Italy. It plans to do the same in coming days in countries including Australia, India and the United Arab Emirates. Such legal protections are already in place in South Korea, the U.S., Japan, the U.K. and Singapore.
Meanwhile, Korean Air Lines Co., the flagship unit of Hanjin Group and the largest shareholder of the troubled shipping affiliate, hasn’t decided how it will disperse the 60 billion won ($54 million) it promised to lend Hanjin Shipping to help ease the cargo chaos.
The planned cash injection is part of Hanjin Group’s pledge earlier this month to put up a total of 100 billion won, including 40 billion won from the group chairman’s personal wealth, to help the shipping line.
Chairman Cho Yang-ho gave 40 billion won to Hanjin Shipping last week.
Korean Air has said it would secure the remaining 60 billion won, using the group’s stakes in the terminals such as the one in Long Beach, Calif., as collateral.
Korean Air said it would hold a board meeting soon to complete the matter.
However, analysts said the most likely scenario is that the South Korean container operator—the world’s seventh-biggest—will eventually be liquidated, marking one of the shipping industry’s biggest failures.
On Monday, a Seoul bankruptcy court judge ordered all of Hanjin’s chartered vessels that have completed unloading to be immediately returned to the shipowners. The judge also asked Hanjin to sell as many ships as possible, and did not rule out the eventual liquidation of the company.
The delays are costing Hanjin $2 million a day in fees to owners of its chartered ships.
Ms. Park, the Hanjin spokeswoman, said the company has already returned four container ships and plans to return the rest when they have been off-loaded.
As of early this month, the company had 141 vessels under its flag, including 97 container ships. Of that total, 60 were chartered and 37 owned by Hanjin.
Hanjin moves roughly 3% of containers globally and up to 10% of those shipped between Asia and Europe. Some 25,000 containers cross the Pacific daily on Hanjin ships.
