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article imageHanjin shipping crisis being felt by tech companies worldwide

By Karen Graham     Sep 8, 2016 in World
Seoul - After filing for bankruptcy protection last week, Hanjin Shipping Company and its creditors are scrambling to move an estimated $14 billion worth of goods off ships that are stranded offshore in ports around the world.
Of the shipping company's 141 vessels, 85 loaded container ships are marooned offshore in 50 ports in 26 countries, denied entry over fears they can't pay port fees. The ships, with as many as 24 crew members each, are running out of food and water, according to Bloomberg.
At least $90 million is needed to allow the cargo ships to unload, and unless the money is forthcoming, tugboat operators, stevedores and any other groups involved in offloading the vessels are steering clear for the moment. In the meantime, billions of dollars worth of appliances, computers and other electronics, furniture, clothing and toys are in limbo.
On Tuesday this week, Hanjin said it would spend $90 million, including $36 million from the personal assets of its chairman, Cho Yang-ho to resolve the issue of the cargo offloading. Hanjin Shipping, the world's seventh largest ocean shipper is owned by a huge family-dominated conglomerate, Hanjin Group headquartered in Seoul. They also own Korean Air.
Hanjin Group issued a statement on Tuesday saying they would provide its stakes in overseas terminals as collateral to borrow $54 million, that along with the $36 million put in by its chairman would satisfy the amount needed to pay the port fees
The only problem with the $90 million is that it is just a drop in the bucket, so to speak. The Guardian is saying Hanjin still needs $543 million to pay for the services it needs to unload its ships, and that involves a number of other groups who want their money up-front.
"Our ships can become ghost ships,” said Kim Ho Kyung, a manager at Hanjin Shipping’s labor union. "Food and water are running down in those ships floating in international waters.” And the problem with the crew members is serious. They don't know if they will be paid, and if they finally are allowed to leave the ships, how they will get back home, reports Fortune.
Meanwhile, manufacturers and retailers worldwide are wringing their hands, waiting to see if the crisis will resolve itself. Samsung has $38 million worth of merchandise stuck offshore on two ships in Long Beach, California. The company says it will "incur great costs" if it has to fly in replacement goods to meet contractual obligations.
"All these costs and delays will be a loss not only to Samsung, but also to major retailers in the U.S. and, ultimately, to U.S. consumers," Samsung says. Hewlett-Packard also has "tens of millions of dollars worth of products" stuck on Hangin ships, reports the Wall Street Journal.
More about hanjin shipping, tech companies, seizure of assets, Creditors, South Korea
 
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