MOSCOW (MRC) -- South Korea’s decision to withdraw support for its largest shipping company has sent shock waves through an ailing global industry. It also shows Seoul’s toughening stance when it comes to troubled firms, said The Wall Street Journal.
Hanjin Shipping Co.’s potential bankruptcy would be the largest container-shipping failure in history, dwarfing all previous carrier bankruptcies, says shipping consulting firm Alphaliner. Not knowing whether they would get paid, ports and handlers from South Korea to China, the U.S., Canada, Spain and elsewhere have refused to handle its cargo. That has stranded ships 45 ships at sea, according to the company, and more than half a million containers.
Berthing and unloading services for Hanjin ships resumed at South Korea’s main ports of Busan and Incheon on Friday after the government said port authorities would guarantee payments for service providers.
A Hanjin spokeswoman said the company also plans to take action in the U.S. and other countries, including filing for protection of assets, to prevent further seizure of ships.
With goods stuck on its ships, the company said Friday that it has been suspended from its CKYHE Alliance. Its Asian shipping partners are rushing to find alternative arrangements to ship electronics, clothing, furniture and other goods as retailers in the U.S. and Europe are stockpiling for the holidays and rivals are boosting freight rates.
South Korea’s LG Electronics Inc., the world’s No. 2 maker of TVs, said it is canceling orders with Hanjin and seeking alternative options. Hyundai Motor Co. and GM Korea Co. said they haven’t been affected by Hanjin because they use other shippers. Samsung Electronics Co. declined to comment.
The country’s financial regulator said it has asked Hyundai Merchant Marine Co. to deploy at least 13 of its ships to Hanjin’s U.S. and European routes before Sept. 7 to help ease cargo delays.
MRC