More than a week after South Korea's biggest container line filed for bankruptcy protection and disrupted cargo movements worldwide, exporters such as Samsung Electronics Co and LG Electronics are finally getting some relief. Hyundai Merchant Marine Co, the nation's number 2 liner, will flag off a vessel to Los Angeles from Busan late Friday to help ease a squeeze after many Hanjin Shipping ships were left stranded, unable to unload or pick up shipments. Bookings for the ship have reached more than 90 per cent, of which the two electronics makers accounted for about 60 per cent, according to Hyundai Merchant. Many more are planned. AP Moeller-Maersk A/S is introducing more services on the trans-Pacific route as well.About $14 billion worth of goods are stuck on 89 of Hanjin's 97 container vessels that are floating off 51 ports in 26 countries, according to Hanjin and court documents. "It will help restore the supply chain," said Rahul Kapoor, a director at Drewry Financial Research Services in Singapore. "But it's going to take several weeks for this disruption to be cleared. You can't mend it overnight."About $14 billion worth of goods are stuck on 89 of Hanjin's 97 container vessels that are floating off 51 ports in 26 countries, according to Hanjin and court documents.
Some cargo owners have managed to unload their cargo from Hanjin ships and are looking for alternative ways to transport them, Busan Port Authority said. The Port Authority paid 60.4 billion won ($55 million) to some of the companies that work on Hanjin ships to ease the situation, it said in a statement late Thursday. While some of the cargo from the vessels is being unloaded, space is running out at the yard, it said.
Representatives at Samsung and LG declined to comment.
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Hyundai Merchant, which is itself in the midst of a creditor-led restructuring program and counts state-owned Korea Development Bank as its biggest shareholder, has 63 container ships and 57 bulk carriers in its fleet. It plans to use some of its idled vessels and some chartered for the extra services.
The one set to sail Friday to Los Angeles has the capacity to carry 4,000 20-foot boxes, according to the company.
Maersk Line, the world's largest container line that's part of AP Moeller, will introduce a new service between Asia and US West Coast with six vessels, responding to increased demand, the company said Wednesday. The service will make calls to ports in China, South Korea, Los Angeles and Long Beach.
"The industry is increasingly interwoven with carriers sharing slots on vessels, so what we are currently seeing is huge disruptions in the global container supply chain," said Peter Sand, chief shipping economist for BIMCO, a Bagsvaerd, Denmark-based association representing owners and operators in about 130 countries. "Despite difficulties at individual carriers, we expect the fundamental imbalance to remain a problem in the industry in the longer term."
It's not just the major trade lanes that are affected by Hanjin's troubles. Hyundai Merchant said Thursday that it plans to form an alliance with three other South Korean lines to offer services to Southeast Asia to minimise disruptions in the region.
Exporters in Asia have been feeling the pinch after Hanjin's collapse. Samsung said this week that $38 million of its goods were stuck on two of Hanjin's ships off Long Beach, California. Though a US bankruptcy court in an interim ruling shielded Hanjin's assets from creditors, there's no guarantee that a berthing at the port will ensure unloading of the items, as tug operators, stevedores and other handlers doubt if they will be paid by the distressed company.
Samsung has said if those parts and goods don't reach its factory in Mexico in time, it may be forced to spend a lot of money to ensure it meets its contractual obligations.
The squeeze caused by Hanjin Shipping pushed up freight rates on a key route to their highest level in more than a year. The Drewry Hong Kong-Los Angeles container rate benchmark surged 40 per cent to $1,743 per 40-foot box in the week ended Wednesday.
"Globally, there's a lot of cargo that is still languishing," said Ryu Je Hyun, an analyst at Mirae Asset Daewoo "The freight charges will maintain an upward trend for up to three months, especially when there's not enough capacity to meet peak demand."
