By Jhoo Dong-chan
A number of consequences are expected from Hanjin Shipping’s debacle at home and abroad. The government vows to cap losses following the nation’s largest shipping line coming under court receivership.
According to a Hanjin Shipping official, Tuesday, the shipping line’s container ship Hanjin Roma was seized at a port in Singapore shortly after creditors announced they would stop supporting Hanjin Shipping.
German ship owner and operator Rickmers, which chartered ships to the beleaguered shipper, filed the provisional seizure on the 5,308-TEU vessel operated by Hanjin Shipping.
If a container vessel is seized at anchorage, it is banned from carrying out any kinds of shipping operations, including loading and unloading as well as docking at port.
Another container ship, Hanjin Mexico, has also halted its shipping operation as its ship owner, PIL, refused to sail due to overdue charter fees from the shipping line.
A number of overseas ports have reportedly refused Hanjin Shipping-owned container ships entry to their harbors. They said they will allow the ships to enter harbors only if Hanjin Shipping pays the costs in cash first for cargo operations.
According to the Korea Shipowners' Association (KSA), the nation's economy is expected to suffer a total of 17 trillion won in sales losses, shipping fare increases and decline in transit shipments if Hanjin Shipping goes bankrupt.
"Korea is an export-driven industry where shipping costs are essential for its competitiveness in the global market," said a KSA official. "It would cause huge damage to the nation's exports."
The government said it vows to minimize industrial impact following Hanjin Shipping’s court receivership.
Shortly after Hanjin Shipping filed for court receivership and its creditors withdrew their support, Strategy and Finance Minister Yoo Il-ho said that the government will “push forward for the restructuring process following the rule that companies must figure out how to survive and find competitiveness” on their own while taking responsibility.
“However, the impact will likely be limited since the finance market has long prepared for such an event.”
In a bid to minimize the economic fallout, the government decided to deploy Hyundai Merchant Marine (HMM) vessels to the shipping routes operated by Hanjin Shipping.