Hanjin Bankruptcy News ~ September 29, 2016 Update

Posted September 29, 2016
Category Company News

Five of Hanjin Shipping's vessels are being held off Chinese ports as of September 26, according to a document posted by the South Korean carrier on its website.  Only two of the five vessels being held are owned by the South Korean shipping line.

Three of the five are categorized as ‘arrested’ ~ vessels detained under court orders, per a Hanjin spokesperson.  They are the Hanjin Dusseldorf and the Hanjin Sooho at the port of Ningbo, and Hanjin Rotterdam at the port of Yantian.

Another two ships are categorized as ‘vessel departure/arrival not available’ ~ vessels held by ports or terminal operators without court orders.  These two are Hanjin Kingston at Ningbo and Hanjin Turkey at Xingang.

Two ships ~ Hanjin Green Earth and Hanjin Piraeus ~ were ‘under way’ to Shanghai upon publication of the document.  Hanjin Green Earth was scheduled to arrive in Shanghai on Tuesday, but Lloyd's List data showed the ship anchored offshore near Shanghai.  The Hanjin Piraeus is planned to call at Shanghai on October 3. 

A Hanjin spokesperson said the company is trying to arrange the two vessels to return to Busan, one of its designated 'safe haven ports’, as they cannot obtain China’s approval for the injunction against attachment of assets obtained in its native South Korea earlier this month.

Hanjin’s Safe Haven Ports

Thus far, Hanjin has secured nine ‘safe haven’ ports outside of Korea ~ Singapore, Hamburg, Long Beach, Algeciras, Valencia, Oakland, New York, Seattle and Manzanillo ~ where its ships can safely unload their cargoes without fear of arrest by creditors.

China remains an 'unfriendly' location, as the jurisdiction does not support automatic recognition of overseas insolvency proceedings; neither does it provide other avenues like in the U.S., where foreign companies such as Hanjin can apply for Chapter 15.  However, creditors in China might still have difficulty recovering overdue payments as the majority of the vessels under detention are on charter hire with Hanjin.

Two Hanjin Vessels Set to Call NY-NJ

Two more Hanjin Shipping vessels are heading for the Port of New York and New Jersey after the departure this week of the Hanjin Miami, the carrier’s first ship to enter the port since the carrier filed for bankruptcy.

The 9,030 twenty-foot-equivalent-unit Hanjin Switzerland is expected to arrive in New York in three weeks (ETA: Oct. 12), having been allowed to pass through the Suez Canal five days ago — the first Hanjin vessel allowed through the waterway since the bankruptcy.  A second ship, Hanjin Chongqing, a 6,655-TEU vessel, is also heading for the port of New York with an ETA at the end of October, according to AISLive.

Hanjin Vessel Fleet Outlook

The two ships’ movements towards New York are the latest sign that a slowly growing portion of the carrier’s fleet is finally reaching its destination, releasing cargo that has been locked up since the carrier filed for bankruptcy in a South Korean court on Aug. 31. About one third of the carrier’s ships are “waiting in the open sea,” and another eight are under arrest, the list on the company’s website says.

Hanjin Shipping and the South Korean government at the weekend were working vigorously to unload and rescue the one-third of its container fleet that was still stranded around the world after a judge ordered Hanjin to return all its chartered ships to their owners.

Late last week, five of the 14 vessels that were bound for US ports at the start of the South Korean bankruptcy proceeding were outside US waters or anchored at sea in those waters, according to Hanjin. Four of those 14 vessels have been ‘arrested’: the Hanjin Montevideo at Long Beach, the Hanjin Vienna at Vancouver, the Hanjin Scarlet at Prince Rupert, and the Hanjin Baltimore at Panama.

Some progress has been made by discharging containers at various ports over the last week, including at Busan, Singapore, Hamburg, Long Beach and Oakland, Alphaliner said.

On Tuesday, the Hanjin Jungil got underway and departed Long Beach at 5:45 a.m., heading for Oakland. The steamer had been anchored in the Pacific Ocean, outside Long Beach, because there were no funds to pay for it to be unloaded.

Two other Hanjin vessels that were denied passage through the Suez Canal are drifting in the Red Sea, while two ships on the Mediterranean side have turned back and are now heading to Valencia and Algeciras, respectively, Alphaliner said.

Maersk Line Ramps Up Hanjin Rescue Efforts

While some carriers have scaled back the deployment of extra ships citing weak demand on the lane where spot rates have leveled off in aftermath of Hanjin’s failure, Maersk Line is continuing to add vessels to handle cargo Hanjin Shipping can no longer haul on the trans-Pacific after the South Korean container line filed for bankruptcy Aug. 31.

“The retraction is due to weak market demand,” Alphaliner said in its most recent weekly newsletter.
The spot rate this week from Shanghai to the West Coast was $1,746 per 40-foot-equivalent unit, down 1 percent from last week, according to the Shanghai Shipping Exchange.

“Maersk has added two more Far East-Algeciras extra loaders and will also put in an ad hoc China-US East Coast loader at the end of September, as it continues to pounce on residual market demand in the wake of Hanjin’s service withdrawals,” Alphaliner reported.

The Hanjin bankruptcy drama is still unfolding in courtrooms in South Korea, the United States, and around the world.
(Source: Journal of Commerce)

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