A Hanjin Ship Can’t Dock Because It Has No Plan to Leave

September 21, 2016, 7:54 AM UTC
Hanjin Shipping Co.'s Container Ships In Port As Cargo Owners Say Bid To Unload Vessels Isn't Working
Containers are unloaded from the Hanjin Gdynia cargo ship berthed at the Port of Long Beach in Long Beach, California, U.S., on Thursday, Sept. 15, 2016. Bankrupt Hanjin Shipping Co.'s efforts to unload vessels in the U.S. while it goes through bankruptcy in South Korea are meeting with complaints from cargo owners and from the companies that service and equip its fleet. Photographer: Tim Rue/Bloomberg via Getty Images
Tim Rue/Bloomberg via Getty Images

Failed South Korean cargo line Hanjin Shipping found the money to unload a full container ship waiting outside a New York-area port. But before the vessel was allowed to dock, it faced another problem: a plan to get back out to sea.

The predicament of the Hanjin Miami, one of 10 U.S.-bound ships stranded by the Hanjin bankruptcy, illustrates one way that disputes over ships, ocean containers and even truck trailers to haul the shipping boxes have stranded at sea some $14 billion of goods around the world.

Since filing for court receivership on August 31, the world’s seventh-largest container carrier has caused chaos for many retailers at a time when they are getting goods for the holiday shopping season.

The National Retail Federation on Tuesday urged U.S. Commerce Secretary Penny Pritzker to find a way to clear up the confusion. “The impact on small and medium-sized companies could be particularly devastating if this situation is not resolved in a timely manner,” the group said in a letter.

Hanjin has the money to dock its Hanjin Miami, Federal Maritime Commissioner William Doyle, whose agency regulates international shipping, told an industry event on Friday.

But the Miami has not been allowed in port because of a dispute about empty Hanjin shipping containers, which the Miami normally would load up as ballast to exit port.

See also: A By-the-Numbers Look at Hanjin Shipping’s Collapse

Without those empties, the ship “will not be able to depart the harbor because it would not have the air clearance to navigate under the Bayonne Bridge — even at a dead low tide,” said Doyle. Without a way to leave, the ship could tie up a berth.

“There are so many disputes right now attached to empty containers that the terminal is not going to load the empties back onto the ship,” Doyle said.

By Tuesday evening, two sources familiar with negotiations said that the Miami had been scheduled to dock and that it would pick up empty containers to leave port. Shipping tracking site shipmentlink.com said it was due to arrive on Thursday and depart the next day.

An attorney for Maher Terminal, which operates the marine terminal in Newark where the HanjinMiami is expected to dock, declined to comment.

The Hanjin Miami is currently off the U.S. East Coast, about 300 miles (480 km) from New York, according to Reuters Eikon data.

The Bayonne Bridge, which held the title of world’s longest arch bridge for 45 years after it opened in 1931, presents a unique challenge to Hanjin.

But other ports also are struggling with questions of who pays for terminal charges and what to do with empty containers. The complexity increased on Monday after a South Korean judge toldHanjin to cancel its ship charter agreements and return empty vessels to their owners.

In the wake of the decision by the South Korean judge, an empty Hanjin Miami may become the responsibility of Reederei NSB, which manages the ship on behalf of its owner, an affiliate of Conti Holding of Munich, according to Reuters Eikon data.

A spokeswoman for Reederei and a U.S. lawyer for Hanjin did not respond to requests for comment.

See also: Hanjin Is Scrambling to Move About $14 Billion in Stranded Cargo

Port terminals, meanwhile, have stopped accepting returns of empty shipping containers because they doubt Hanjin will pay to store them.

“The Hanjin boxes are radioactive. Nobody wants to take responsibility for them,” said Mark Hirzel, chairman of the Los Angeles Customs Brokers & Freight Forwarders Association Inc.

As containers on chassis pile up in far-flung storage lots, it has created a shortage of the trailers used to transport containers on land.

Darren Azman, an attorney for Bermuda-based Textainer Group Holdings Ltd said cargo owners and other Hanjin parties are working out an agreement that they hope will normalize the movement of shipping containers.

But U.S. retailers and manufacturers who own the cargo are caught in the confusion.

Alex Rasheed, president of Pacific Textile and Sourcing Inc, a Los Angeles-headquartered importer and wholesaler of apparel, is anxious to receive $300,000 worth of seasonal fall clothing in two containers on the Hanjin Jungil, which is waiting off the coast of Southern California.

“We’re going to start feeling the pressure unless there is some kind of resolution,” Rasheed said.

Hanjin‘s bankruptcy also has U.S. exporters that were relying on the company scrambling to find alternatives, including flying goods to foreign markets at a loss, said Hirzel.

“I’ve even heard about air transport of agriculture exports,” Hirzel said. “Economically, it’s a guaranteed loser … The only reason you would do that is to meet an order to get a contract in the future.”

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