[131016.EN.BIZ] Hanjin Customers Turn To Rail And Air To Move Ocean Backlogs

HANJIN customers that have suffered delays due to the container line's bankruptcy are now looking for alternative shipment modes into European markets to ensure key products are in stores ahead of the holiday season, according to leading forwarders.

Forwarders say the preferred option for shippers trying to expedite shipments to Europe while also limiting transport costs is rail. However, air freight solutions are expected to become more prominent the longer cargo is stranded in Hanjin's network as the countdown to the Christmas sales season begins, the UK's Lloyd's Loading List reported.

"In view of the current situation, we are seeing higher demand for rail services to Europe. We are also receiving more enquiries in Europe for rail deliveries to Asia, especially Korea," said a DHL statement.

DB Schenker also reports growing demand for accelerated shipments resulting from Hanjin's bankruptcy and the subsequent supply chain chaos that has followed.

"Some leading electronics customers face serious challenges to get time-critical supplies to Europe," a DB Schenker spokesman said. "From the corporate side, we have counted three major customers asking for rail as a substitution for ocean to avoid air shipments."

Procurement research analyst at market research firm IBISWorld, Ashley Cruz, said the inability to retrieve cargo from stranded Hanjin ships had sent retailers and forwarders into a spin.

In the aftermath of Hanjin's receivership filing, which left as many as 500,000 containers of cargo stranded offshore, she said freight forwarders were scrambling to reorganise and redirect the rail, air freight and trucking services that were supposed to follow the docking and unloading of Hanjin ships.

"Forwarders have also been rushing to arrange alternative transport routes for cargo that was due to be carried on Hanjin ships," she said.

"Most freight forwarders are seeking other deep sea cargo carriers, in spite of the substantial spot price spikes that have occurred during the past few weeks and could potentially last for months.

"However, some forwarders are also looking to international air cargo services as a substitute for ocean shipping in order to avoid further delays," said Ms Cruz.

A number of airlines have already reported an upsurge in demand out of Asia post-Hanjin and many others have capacity on standby.

Korean Air, a shareholder in Hanjin Shipping, has also reportedly laid on extra freighters to help out Korean exporters including Samsung. However, a spokesman for the carrier refused to confirm the reports.

But although there will be some switch to alternative modes, Swiss forwarder Panalpina believes it will be minimal, at least in terms of volumes.

Source : Unknown.