[060916.EN.BIZ] Naked Hanjin Ships Seized, Cargo Refused, Creditors Grab What's Grabbable

KOREA's big box carrier Hanjin Shipping, stopped taking cargo and US ports began turning away its ships after it filed for receivership.

The move caused US shippers to brace for steep rate increases on routes to and from Asia as large scale capacity was withdrawn from the market.

Singapore port officials said the 3,711-TEU Hanjin Rome was seized after a request by a creditor on Tuesday, reported the Wall Street Journal.

Another, the 13,100-TEU Hanjin Sooho was stopped from entering the Port of Shanghai as creditors sought to have ports either deny entry or impound Hanjin-operated ships.

Three of its ships, reported the WSJ, expected at Los Angeles and Long Beach drifted off the coast Wednesday, their contents marooned indefinitely.

Terminals from Long Beach to Seattle turned away outbound containers that had been destined for Hanjin ships, sending US exporters scrambling to rebook, truck, reload and repack their cargo into other carriers' containers.

Shippers and truckers fretted about rising costs and shrinking capacity.

"There's going to be exorbitant costs," said Peter Schneider, vice president of TGS Transportation in California.

"Everything is unravelling." His company has about US$6,000 to $7,000 in outstanding bills to Hanjin, which he will likely write off, but other trucking companies could be harder hit. Smaller companies that "had all their eggs in one basket with Hanjin - they may go under," he said.

The filing with the Seoul Central District Court came just a day after the company's creditors cut off a lifeline, as financial assistance of more than KRW1 trillion (US$896 million) failed to keep it afloat.

The Korean government said it wants Hanjin's domestic rival, Hyundai Merchant Marine, to buy healthy assets from the troubled company. It rejected the idea of a merger.

A Hyundai Merchant spokesman said the company would discuss the matter with the government and Korea Development Bank. The state-run bank is also Hyundai Merchant's main creditor. Hyundai Merchant, the country's second largest shipping company, is on a recovery track under a creditor-led debt restructuring programme.

Government officials said Hanjin's receivership also could lead to the company's exclusion from a global shipping alliance, reducing its chances of survival.

Source : HKSG.