The announcement of Hanjin Shipping’s receivership filing on Wednesday caused the shipping industry – from freight brokers to shippers – great concern over the impact of this development on the global supply chain. Hanjin is the largest container shipping company in South Korea and the seventh largest in the world, with daily capacity at 25,000 shipping containers, according to the Wall Street Journal (WSJ).
In fact, some ports have already turned away Hanjin ships. A Hanjin spokeswoman was quoted in Reuters as saying Shanghai and Xiamen in China, Valencia, Spain, and Savannah, Georgia had blocked access to Hanjin ships on concerns they would not be able to pay fees. In addition, on Wednesday, the Port of Virginia said it will “not be accepting any inbound Hanjin cargo (freight for export) at any of the port’s marine or intermodal terminals.” The port, however, will accept empty Hanjin containers at the “PPCY” or Pinners Point Container Yard, according to American Shipper. It was unclear what would happen to Hanjin freight arriving by ship. The port added it is “developing plans for how to handle Hanjin cargo that is already on-terminal.”
Moreover, two of the largest container ports in the U.S., in Los Angeles and Long Beach, California, were each expecting the arrival of a Hanjin ship on Wednesday. According to the director of the Marine Exchange of Southern California, which keeps tracks the vessels arriving and departing and directs ship traffic, both vessels have dropped anchor off the coast and canceled plans to berth in the ports.
Hanjin’s court protection was filed in order to reorganize the company after support for its liquidity plan from South Korean Banks was denied, according to the Journal of Commerce. The shipping company seeks “normalization of operation through commencement of company reorganization” with the decision about future plans to be decided after a court review of the application.
In the wake of the receivership news, freight brokers and shippers are looking to find other carriers for their cargo, and are concerned over the potential disruption this will have on their business. Roanoke Underwriting is ready to help you address your clients’ concerns regarding cargo currently on board Hanjin vessels or while in their custody at various ports. For questions regarding your clients’ insured cargo, they can contact the Roanoke Claims Services team at 1-847-969-7064.
In the meantime, we recommend that the best course of action right now is to pursue all reasonable measures to protect the cargo and to ensure it is forwarded to the intended destination should Hanjin fail to complete the voyage(s). In such cases, the insured may be reimbursed for charges properly and reasonably incurred, as per the policy terms and conditions.
Your Roanoke Underwriting team is closely monitoring this situation and will provide any new developments on our website. If you or any of your clients have questions or concerns, please call Roanoke Claims Services at 1-847-969-7064 or email us at MarineClaims@RoanokeGroup.com.