[121016.EN.BIZ] Thousands of Hanjin Boxes Stuck In Limbo Clog LA-Long Beach Ports

STRANDED Hanjin containers are clogging supply chains and the ports of Los Angeles and Long Beach with thousands of box-mounted chassis taking up space and getting in the way of the flow of other cargo, reports American Shipper.

Shippers or truckers are unable to return containers to terminals or container yards of the near bankrupt South Korean shipping giant, so the chassis are not available for use.

"Other ports talk about hundreds, here it is thousands. The situation is critical," said Harbour Trucking Association executive director Weston LaBar.

He estimates at that 10,000 chassis out of 100,000 cannot be used because they have Hanjin containers on them.

In a Newark bankruptcy court filing, Hanjin said it did "not assert any interest in containers that it does not own or are the subject of a saleleaseback agreement," but added it had not settled issues relating to the saleleaseback agreements.

Hanjin also told the court it "advised customers that they should contact the owners of the containers to arrange for inland delivery and their return".

As to Hanjin owned containers, Hanjin is finalising a lease for property located near New York City for the return and storage of Hanjin containers. Hanjin said it was also working diligently to find space on the west coast for the return and storage of its containers.

"Moreover, Hanjin has been working with more than 70 marine terminals and offdock container yards to arrange for return and storage of Hanjin-owned and Hanjin-leased containers.

But Hanjin said it is has been advised by more than 40 of such terminals and yards that they are now at full capacity.

Said Mr LaBar: "When Hanjin declared bankruptcy, the trucking community saw a real dire situation that they would be facing. We've been pretty disappointed with the allotment of chassis in the pool of pools."

He said repairs were not being made at an adequate pace, there were concerns there were not going to be enough chassis for companies to operate.

Long Beach port's chief commercial officer Noel Hacegaba said they were encouraging the largest source of chassis in the region - the "pool of pools" - created by leasing companies DCLI, FlexiVan and TRAC Intermodal to do chassis repair faster.

They were also looking for locations where containers owned and leased by Hanjin can be stored.

The pool of pools has about 74,000 chassis, and 700 returned to service in just the past week. The percentage of "bad order" chassis has fallen to 7.6 per cent from nine per cent in the past two weeks.

Mr Hacegaba said leasing companies are continuing efforts to speed repairs and put the number of Hanjin containers "on the street" at 10,000 with 5,000 containers at terminals.

Many containers are at Pier T in Long Beach, which is operated by Total Terminals International (TTI). Hanjin's 2015 annual report notes it owns 54 per cent of TTI.

Meanwhile, other containers are scattered among at least five other terminals in the two ports where Hanjin or its space sharing partners in the CKYHE Alliance Cosco, "K" Line, Yang Ming and Evergreen operate.

Mr LaBar said some larger trucking companies do have the ability and space to put Hanjin containers on ground and continue to use chassis, but he said for small and medium size draymen, "they have run out of space and may not necessarily have the ability to ground Hanjin containers, so for them, the chassis situation is critical and they are looking for some true relief".

It is not clear exactly what percentage of the Hanjin containers in southern California are leased and what percentage are owned.

But many are leased from Triton International, the world's largest container lessor, formed recently through the merger of Triton Container and TAL International.

At a presentation to securities analysts last week, Triton said it had 87,010 containers (with 148,108 TEU of capacity) hired by Hanjin with a net book value of about US$243 million.

Triton also said it was seeking to gain control of those containers and redeploy them as quickly as possible.

With leased containers, Mr LaBar said there is some opportunity to return those containers, but he said some locations designated by leasing companies for returns "filled up quickly".

"You get some in and out, but they still tend to be pretty much fully utilised," he said. "It's not like there is a large amount of these leased boxes that are able to be returned at this point in time."

LA port spokesman Phillip Sanfield said the port had short-term agreements with terminals and other businesses to store containers, mostly those leased to Hanjin in and around the port.

But space was limited in and around the port. Port executive director Gene Seroka said storage was being set up away from in the "Inland Empire" area.

Mr Hacegaba said Saybrook Capital, affiliated with Total Transportation, is making 50 acres available in Ontario, California for Hanjin leased boxes, but not owned.

Said Mr LeBar: "I don't think that does anything for the trucking community unless that is a termination yard. You drop your box 50 miles from the harbour and you pay $15 a day on storage. That is not a solution."

LaBar and Hacegaba said none of the marine terminals in Los Angeles and Long Beach are accepting Hanjin-owned boxes, including TTI's terminal at Pier T.

Source : SN – TR.