Ports, Courts, and Customers Work Through Hanjin Bankruptcy Complications
Cargo owners, non-vessel-operating common carriers, vendors, and port and terminal operators are all struggling through the complications of cargo stranded by Hanjin Shipping’s bankruptcy. When Hanjin filed for bankruptcy in South Korean court on August 31, 2016, over 80 vessels either owned or chartered by the company were left without the necessary funding to dock and unload cargo at ports around the world. Since that date, Hanjin Shipping has pursued the protections of bankruptcy courts in other countries, including the United States, and entities doing business with Hanjin have worked to recover their cargo and receive payment for their services.Hanjin Shipping filed for chapter 15 bankruptcy protection in the U.S. on Friday, September 2, 2016. The company also secured a provisions protective order from U.S. Bankruptcy Judge John Sherwood to prevent the company’s creditors from seizing ships or property, and to allow cargo owners to make arrangements to retrieve their freight. Additional instructions from the court will allow Hanjin to spend money to dock at U.S. ports, and to unload vessels that have been stranded on the ocean following the initial bankruptcy filing.
As the Hanjin ships unload their containers, U.S. ports have collected money up front from a Hanjin emergency fund, and levied significant fees on cargo owners to recover that freight. The Ports of Los Angeles and Long Beach in California have unloaded several Hanjin ships. The Port of Houston initially suspended the movement of nearly 400 Hanjin containers, after payments from the shipping line were interrupted, then charged $100 per container to pick up a Hanjin container, before allowing cargo owners to pick up imports they had already paid for without payment of demurrage or additional fees. Other U.S. ports have charged exporters to dray out loaded Hanjin containers, re-load goods and re-book them on another carrier, and pay demurrage fees while the containers sat outside the terminal.
As a result of these fees and concerns, a group of NVOCCs including Carolina Ocean Lines, Kuehne + Nagel, Domek Logistics, Apex Maritime, MIQ Global Logistics, Mitsubishi Logistics America, Dynamic Worldwide Logistics, and WorldBridge Logistics have filed a request with the Judge Sherwood in U.S. Bankruptcy Court to extend his protective order to include those companies trying to recover their freight. Clarification and extension of the protective order would, ideally, allow NVOCCs and other shippers to reclaim cargo while paying only the fees as contracted by Hanjin with third parties. Such an order would ensure that those third parties are not able to inflate costs for shippers and cargo owners who have been left in a lurch by the Hanjin bankruptcy.
TIA’s International Logistics Conference is following the Hanjin bankruptcy issue closely, and is the point of discussion between TIA members who move freight internationally. For additional information, please contact Will Sehestedt at sehestedt@tianet.org.
