Hanjin Shipping was granted temporary protection by the U.S. District Bankruptcy Court in Newark that will prevent Hanjin ships from arrest and its vendors from breaking contracts.
Attorneys for cargo owners, chassis companies, terminals, and fuel companies had argued against the protection as they believe that the protection granted will impede their efforts to obtain their cargo or get paid for their services from Hanjin.
Hanjin ships in Australia, China and Singapore were under arrest after companies requested their seizure due to nonpayment of bills. Some Hanjin ships have been stranded at sea outside U.S. ports, fearing to make entry and being seized.
Ilana Volkov, an attorney representing Hanjin said, “We need a provision of relief so that the operation in the U.S. can continue, free of concerns that ships are going to get arrested”. Volkov went on to say when commenting on the likelihood that creditors will be paid, “All we can assure people is that the company is working around the clock to raise the necessary financing so that we can start paying people.”
Approximately 100 companies are now working to retrieve stranded cargo or to obtain payment from Hanjin via the U.S. bankruptcy courts. Trade analyst Susan Kohn Ross commented, “What will add to the complexity is the bankruptcy court does not understand supply chain issues. The bankruptcy court is going to need a lot of educating as to who owns the cargo, what legal interest Hanjin has in any given shipment, the difference between order of shipper and direct consignments and other basic admiralty principals.”
Hanjin accounts for 7.8 percent of the Asia – U.S. West Coast trade volume, and has over 8,200 cargo owners worldwide.
In other news, the Department of Homeland Security (DHS) has again waived the 100% scanning of all inbound ocean containers. The original implementation was to be four years ago, but this third waiver allows the inspection deadline to be put off another two years.
DHS officials maintain that the requirement cannot be put in place due to logistical, technological, diplomatic, environmental, and funding issues. In addition to costing billions of dollars, DHS officials have advised that such a security regime would dramatically slow cargo processing, increasing congestion up and down the supply chain.
