WASHINGTON-Retailers, brands and agricultural producers, still struggling with the South Korean shipping giant Hanjin Shipping Co.’s bankruptcy, outlined their concerns in a letter to Commerce Secretary Penny Pritzker on Tuesday.
Led by the National Retail Federation and the Hardwood Federation, a coalition of more than 120 organizations representing retailers, manufacturers, agribusinesses and other sectors impacted by the shipping crisis sparked by Hanjin, urged Pritzker to assist in a resolution.
“U.S. businesses rely on predictability in their supply chains, particularly during the busiest shipping season of the year,” the coalition wrote in the letter. “The recent bankruptcy filing has caused widespread disruptions in freight shipments worldwide.
“Since this is ongoing, the level of anxiety remains high as shippers wonder when Hanjin ships will be allowed to enter ports and if their goods will be seized by Hanjin’s creditors once they are docked,” the coalition said.
While recent developments have given companies some hope that progress is being made to try to mitigate the impact, more work needs to be done, industry groups said.
Hanjin filed for Chapter 15 protection under U.S. bankruptcy laws in U.S. Bankruptcy Court in Newark, N.J., earlier this month, seeking to protect its assets and shield itself from creditors, some of whom have reportedly seized its ships.
A bankruptcy court judge recently issued an order preventing creditors from seizing Hanjin ships and assets in the U.S. Industry groups saw that as a positive step in addition to reports that Hanjin Group, the parent of the shipping company, had offered to raise $90 million to help ease the crisis.
Brands and retailers have been hit hard by Hanjin’s bankruptcy, which has potentially left tens of thousands of cargo containers carrying their merchandise in limbo.
Import cargo volume is forecast to be at “near-peak” levels in September, at the same time retailers work to obtain and clear cargo containers related to the Hanjin bankruptcy, according to the latest monthly Global Port Tracker report released by NRF and Hackett Associates.
The coalition noted in the letter that there are concerns about “critical cargo” stuck at overseas ports.
“For some, there is added confusion about the location of cargo, where cargo will be unloaded and how the cargo will be transported,” the groups said. “The trade community is also facing steadily increasing freight charges as they look for new transportation options as well as concerns about fees assessed on cargo.”
The impact on small-to-medium-sized companies could be “particularly devastating” if the situation is not resolved in a timely manner, the coalition warned.
Pritzker has had some outreach to the business community and the coalition urged her to continue working with the South Korean government to “bring about an economically beneficial resolution that will allow cargo to move through the global supply chain and give certainty to U.S. businesses.”
Hanjin said in its court filings that it ranks as the world’s ninth-largest container shipping company, transporting more than 100 million tons of cargo a year. The company said it operates 60 regular lines worldwide and 140 container bulk vessels. It also operates 13 container terminals, two distribution centers and six “off-dock container yards” in major ports and inland areas around the world.