Korea, US discuss cargo disruption over Hanjin crisis

Government representatives from South Korea and the US have held a meeting in Seoul to seek ways to prevent cargo disruption in ports in North America over the deepening Hanjin crisis, officials said Friday.

Korea’s Oceans and Fisheries Vice-Minister Yoon Hak-bae and US Department of Commerce’s Deputy Assistant Secretary for Asia Diane Farrell shared measures against the Hanjin aftermath amid widespread concerns that the near-bankrupt company could impede cargoes heading to the US ahead of the upcoming holiday season. 

The US asked the details of Korea’s countermeasures while Seoul requested support for the port entry of stranded Korean vessels in the US coast.

The world‘s seventh-largest container shipping firm filed for court protection in Korea last week. The shipper is seeking stay orders in over 40 countries in fear of creditors’ trying to seize the ships. Concerns have been rapidly growing over massive cargo chaos if Hanjin‘s ships remain afloat, as well as its impact to countries worldwide.

The American group of retailers including Walmart has urged the US government to solve the problem before the Black Friday season in November.

The US retail industry prepares for the Thanksgiving season from September. Hanjin Shipping has made up about 8 percent of the trans-Pacific trade volume for the US market.

As of late Thursday, a total of 89 out of 128 Hanijn ships have had their operations disrupted in 26 countries. The value of the stranded containers is estimated to be about $14 billion won.

Four vessels have been seized in Singapore, China and Australia.

Complaints from local trading companies are also escalating.

According to the Korea International Trade Association, a total of 258 export damage cases have been reported since Sept.1, as of Friday morning.

The total invoice value is estimated to be around $111 million, the agency said.

By regions, Asia accounted for the most with 131 cases, followed by the Americas with 118 cases and Europe with 113 cases.

Meanwhile, Hanjin Shipping is projected to face another hurdle as its parent group’s urgent financial support is being delayed.

On Tuesday, Hanjin Group vowed to inject 100 billion won ($90.5 million) to the near-bankrupt company to help cover the overdue balance. The group said the fund will consist of 40 billion won of Hanjin Group Chairman Cho Yang-ho’s private assets and 60 billion won from Korean Air, the largest shareholder of the shipping company.

The airliner’s board members, however, have failed to come to a consensus on Hanjin Group’s fund plan two days in a row.

The group previously said it would provide 60 billion won in loans secured by the shipping unit’s stakes in overseas terminals such as Hanjin Long Beach.

The group said it will hold the board meeting again on Saturday.

The chairman’s plan to support 40 billion won in loans secured by his stocks is to be carried out next week as scheduled, it added.

By Lee Hyun-jeong (rene@heraldcorp.com)