U.S. court approves temporary bankruptcy protection for Hanjin Shipping

Last week, Hanjin shipping, one of the largest container shipping lines in the world, filed for bankruptcy protection.

Hanjin Group has made a decision to arrange 100 billion won (US$90 million) on its own, including 40 billion won (US$35.5 million) from its Chairman Cho Yang-ho’s private property, so as to resolve logistics disruptions caused by Hanjin Shipping’s court receivership.

South Korea’s Hanjin Shipping Co. was granted a provisional U.S court protection from creditors so that its vessels can dock and unload cargoes in USA ports, a move that raised hopes for similar actions in other jurisdictions and to help prevent a major havoc in shipping deliveries.

A request for food and water was rejected, said the captain via a satellite phone and who declined to use his name citing company policy.

“September is the peak season” for shipping before seasonal holidays, said Seigo Ando, a senior analyst at Mitsubishi UFJ Morgan Stanley Securities.

That still falls short of the fees that Hanjin Shipping must pay for services it needs to offload cargoes already on its vessels.

Hanjin Shipping, the world’s seventh largest shipping line by capacity, is one of the first shipping companies investing in port infrastructure facilities in Vietnam.

Once the ships dock, it takes about two days to get everything unloaded, according to Hacegaba.

Hanjin Shipping was handling almost 8 percent of the trans-Pacific trade volume for the US market, and with its container ships marooned offshore, major retailers have been scrambling to devise contingency plans to get their merchandise into stores. The company handles an estimated 7.8% of trans-Pacific freight destined for the U.S.

The global shipping industry has been operating at a loss since the end of 2015, and it’s set to lose about $5 billion this year amid an oversupply of vessels, according Drewry Maritime Research.

As ShippingWatch has previously reported, the prospect of unpaid bills has encouraged terminal operators in Europe to charge anything from United States dollars 190 to USD 1,700 to offload containers to the end users, who are increasingly desperate to get goods from South Korean manufacturers into their stores so that they are ready for the Christmas season.

Additionally, it said that CMA CGM’s containers now on Hanjin’s vessels would be unloaded and transhipped to the French company’s and other partners’ ships.