[THE INVESTOR] Cargo disruptions triggered by the cash-strapped Hanjin Shipping deepened worldwide Wednesday, with shippers and politicians holding both its parent company and the government responsible for failing to come up with preventative measures.
Of 128 Hanjin Shipping carriers owned by the company, 85 or about 66 percent of the total are in abnormal status as of 5 p.m. Tuesday, according to the company.
Abnormal status refers to ships standing by on the high seas or banned from loading and unloading at ports.
The shipper has been seeking stay orders in over 40 countries to stop its ships from being seized by its creditors.
According to the Korea International Trade Association, a total of 161 export damage cases have been reported as of Wednesday morning. The number is five times higher than when the association first started to receive damage reports on Sept. 1.
This is projected to have caused over $50 million in financial losses, the agency said.
“There have been calls from small and medium-size trading companies that this week is the most critical,” said KITA officials.
By types of damage, ship arrest accounted for the most, with 58 cases, followed by docking refusal with 54 cases.
By regions, the Asian region and the Americas faced the most losses with 84 cases in total, followed by Europe, with 69 cases.
Local shippers have urged the government to take practical measures against the snowballing damages.
The Korean Shippers’ Council under KITA, which is the only support group for shippers in Seoul, demanded that Hanjin Shipping transparently release information about all vessels and cargo.
“Local trading companies that loaded their cargo on Hanjin ships have not been able to figure out the ‘whereabouts’ of their freight. Hanjin Shipping must promptly provide transparent information about the sailing information of the vessels that are abnormally running, cargo information and other relevant information,” said the group.
The association also urged the government to deploy a sufficient number of alternative vessels and to quickly come up with measures to normalize sea freight transportation.
Currently, only 13 vessels -- nine Europe-bound lines and four US-bound lines -- are temporarily deployed to ease the cargo transportation issue.
Meanwhile, the US court on Tuesday temporarily granted the protection of the near-bankrupt company in the states, allowing Hanjin ships to enter ports without ship arrest concerns.
US bankruptcy Judge John Sherwood approved of a motion filed last week by Hanjin Shipping that sought to extend to the US protection from creditors.
The protection measures disallow US creditors from taking actions against ships and assets of the ailing company.
The temporary order will be finalized Friday after talks with shareholders over issues of using ports and terminals, the court said.
Hanjin Shipping has sought the legal protection of its assets in 43 countries, with Japan granting it first on Tuesday.
By Lee Hyun-jeong/The Korea Herald ()
