The failure of the world's seventh-largest container shipper comes during the industry's busiest season ahead of the year-end holidays, and has also sent manufacturers scrambling as they worry about the fate of their cargo and surges in freight rates.
"The impact on importers and exporters is having a ripple effect throughout the global supply chain," Sandy Kennedy, president of the US Retail Industry Leaders Association said in a Thursday letter to the Department of Commerce and the Federal Maritime Commission.
Hanjin accounts for 7.8% of trans-Pacific trade volume for the US market.
Hanjin filed for court receivership this week after creditor banks decided to end financial support. Adding insult to injury, it has also been suspended from the CKYHE shipping alliance, which includes China COSCO, and Evergreen Marine Corp Taiwan Ltd.
A South Korean court has ordered the start of rehabilitation proceedings and set a Nov 25 deadline for the carrier to submit a plan, appointing Hanjin Shipping CEO Suk Tai-soo as trustee.
However, industry insiders and analysts have said it is unlikely that Hanjin Shipping can survive as creditors make claims on its assets and customers look elsewhere, setting the stage for what would be the industry's largest-ever bankruptcy in terms of capacity.
"It's going to be exceptionally difficult to turn it around as cargo owners are going to be very wary of booking with Hanjin, for fear that their boxes may be stuck in port if Hanjin vessels get arrested by the creditors," said Alan Murphy, CEO of consultants SeaIntel Maritime Analysis.
Hanjin operates 98 container ships. About 10 have been seized at Chinese ports by charterers and port authorities. Another was seized in Singapore by a creditor.
Other ships have been denied entry to ports or unable to dock as container lashing firms fret they will not be paid.
It remains unclear how many vessels are currently operating.
A spokeswoman for Hanjin could not be reached on Thursday.
Hanjin shares, which have been suspended since plunging 24% on Tuesday, will resume trading on Sept 5, the stock exchange said. - Reuters
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