Movement on resolution of the status of hundreds of thousands of containers stranded on Hanjin ships on the high seas and in ports is progressing, albeit at a much slower pace than shippers and consignees would like to see.
Judge John K. Sherwood of the U.S. Bankruptcy
Court in Newark, NJ, issued an interim order on Friday affording Hanjin
Shipping protection under Chapter 15 of the U.S. Bankruptcy Code. Chapter 15 is
a part of the U.S. Bankruptcy Code that gives a U.S. Bankruptcy Court judge the
discretion to issue an order to cooperate with a foreign bankruptcy court that
has original jurisdiction.
By issuing his interim order, Judge Sherwood
has allowed Hanjin ships to enter U.S. ports without risk of being “arrested”
(a term in admiralty law that is synonymous with seized). Notwithstanding the
fact that the ships can now enter the ports without risk of arrest, everyone
involved in the process of unloading the ship has to be willing to play their
role. However, because there are significant questions about Hanjin’s ability
to pay for post-bankruptcy expenses, the terminals, stevedores, railroads, and
trucking companies are balking at performing any work until there are some
assurances that they will be paid.
Nonetheless, the Hanjin Greece arrived early
Saturday morning at Total Terminals International (TTI) in the Port of Long
Beach and began discharging its cargo. It is important to note that TTI is
majority owned by Hanjin and operated as a subsidiary of Hanjin Shipping. The
work being done at TTI came after news that Korean Airlines, the largest
shareholder in Hanjin, approved $54 million in assistance to Hanjin. During the
hearing on Friday in Judge Sherwood’s court, Hanjin stated that it had $10
million allocated to work several ships sitting at anchor of the coast of
This progress followed news on Thursday that
cargo aboard the Hanjin Scarlet was being discharged at the Fairview Container
Terminal (FCT) in the Port of Prince Rupert, British Columbia. FCT is jointly
owned by the Canadian National Railway (CN) and DP World. It was reported that
DP World was requiring pre-payment for the handling of all Hanjin containers.
CN has offered to move the containers being discharged and was in the process
of publishing relevant rail charges to destinations in Canada and the U.S.
Another hearing was scheduled for September
12 to address a number of issues raised by creditors as well as those who would
have to provide post-bankruptcy services to discharge and move Hanjin cargoes.
At the same time, it was reported that HP and Samsung both supported the
issuance of the Chapter 15 order, hoping that it will expedite the process of
recovering the hundreds of containers with tens of millions of dollars
currently aboard Hanjin ships.
The Commerce Department told American
Shipper on Friday that, “The Administration is aware of the Hanjin bankruptcy
and its impact on the movement of U.S. cargo around the world. We are in close
touch with the South Korean government as they work to provide needed financing
that will allow U.S. goods to reach their destinations. Additionally, we are
maintaining strong coordination across the Federal government and will continue
to closely track this situation. We encourage all parties to work together to
continue moving these goods through the shipping network and to their intended
destinations as quickly as possible while bankruptcy proceedings continue.”
ISRI will continue to provide information
regarding this matter, which is affecting a large number of scrap recyclers, as
it becomes available.
For more information, contact Scott