LOS ANGELES, Calif.— South Korean cargo giant Hanjin Shipping Company filed for bankruptcy on Wednesday, leaving cargo ships marooned across the globe.
According to the Associated Press, Hanjin’s ships have been refused permission to offload cargo or take aboard new containers because dock workers have no guarantee of being paid.
On Thursday, three Hanjin ships ranging from 700 foot to 1,100 feet were either drifting off shore or anchored away from their terminals at Long Beach, Calif. As of Friday, 27 Hanjin ships had been refused entry to ports or terminals.
Hanjin holds nearly 8 percent of U.S. trans-Pacific trade volume, and the freezing of its fleet could send a ripple effect through retailers in a myriad of industries—including fishing.
“Retailers’ main concern is that there (are) millions of dollars’ worth of merchandise that needs to be on store shelves that could be impacted by this,” Jonathan Gold, the National Retail Federation’s vice president for supply chain and customs policy, told the Associated Press.”Some of it is sitting in Asia waiting to be loaded on ships, some is already aboard ships out on the ocean and some is sitting on U.S. docks waiting to be picked up. It is understandable that port terminal operators, railroads, trucking companies and others don’t want to do work for Hanjin if they are concerned they won’t get paid.”
Shipping prices from China to West Coast U.S. ports rose $600 per container this week; East Coast shipments rose $700. Hundreds of U.S. tackle brands rely on components or complete products arriving from South Korea, Japan and China.
How is the bankruptcy affecting manufacturers?
The U.S.-based manufacturers that FTR spoke to about this story—rod companies and electronics manufacturers among them—are not immediately concerned about Hanjin’s plight. Most say they will use alternative methods such as air shipment if needed. FTR has reached out to Japanese and Korean-based manufacturers but has not yet received a response. A major tackle importer did surmise that their shipments could be affected; however, they were unsure how many of their imports crossed the water via Hanjin.
The Wall Street Journal reports that over $14 billion in cargo is currently stranded at sea.
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