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IT IS TIME FOR ALL OF THE STAKEHOLDERS TO TAKE A

HARD LOOK AT THEIR PARTNERS WITHIN THESE SHIPPING

ALLIANCES. AND, WHEN THERE IS TROUBLE, THE PARTNERS

SHOULD STEP IN TO HELP.

– William Doyle, U.S. FMC Commissioner

By many accounts, Hanjin was beyond the point of being ments, told Maritime Logistics Professional, “This is a bad saved. For example, VesselsValue, the sister ? rm of a London situation because Christmas will not wait for these containers (UK) based shipbroker, said that Hanjin’s owned vessels were and some of our customers may cancel some of their orders. worth approximately $1.7 billion. As its implosion began, its We didn’t even have a contract with Hanjin, but got stuck on debt to asset ratio (which considers its 37 owned vessels) of these ships through a vessel sharing agreement that Yang Ming 250% was 3-½ times the 70% considered to be “aggressive” (with which we do have an agreement) has with Hanjin.” by ship ? nance experts. Those multi-billion dollar ? nancial Ultimately, Adler’s ? rst vessel arrived on October 13th, a parameters nevertheless pale in comparison to the numbers month later than its original ETA. The containers were eventu- surrounding the implications of Hanjin’s collapse on cargo ally off-loaded, but a ? nal vessel, scheduled to arrive in late supply chains. Hanjin was moving just under 8% of trans-Pa- October, had already been arrested three times and its status ci? c trade from Asia into the U.S. and 10% of the ? ows from was still unknown as this magazine went to press.

Asia into Europe. And, the WSJ estimated that Hanjin was handling 3% of the global box trade. Enter the Attorneys

Many industry participants were surprised when Hanjin threw Predictably, Hanjin assets, all over the globe, were afford- in the towel, but some were not. Matthew Kobussen, Direc- ed little respite from the storm. In Vancouver, BC maritime tor- Global Logistics at Baltimore-based Customs Broker and lawyer Shelley Chapelski of Bull, Housser & Tupper told

NVOCC Samuel Shapiro & Company, talked about reading the Maritime Logistics Professional, “The Hanjin Scarlet and the tea leaves in the months preceding the collapse, telling Mari- Hanjin Vienna were arrested in Canadian waters, at Prince time Logistics Professional, “In July and August, Hanjin was Rupert and Vancouver respectively, in early September. The very aggressive in trying to get share – they were chasing the Vienna was arrested by our ? rm on behalf of ship docking market very hard. Clearly, some companies gambled and lost.” company. We also act for other creditors against both vessels.

After the initial arrest of each vessel by a creditor, various

Terrible Timing: other creditors have ? led ‘Caveat Releases’ which means that

As the crisis unfolded, the most immediate problems con- the ship cannot be released from arrest without giving that cerned the disposition of cargo aboard Hanjin vessels, and creditor the opportunity to obtain security for its claim. In ef- vendors owed money at the time of the ? ling. Analysts es- fect, each has been arrested by multiple creditors.” timated that as many as 500,000 containers were stranded Echoing the time frames described by Kobussen and Lud- aboard Hanjin vessels, with cargo belonging to an estimated wig, Chapelski also reported that, nearly two months after the 8,300 consignees worth $14 billion. According to Samuel original vessel arrest, “Hanjin Shipping has just applied to the

Shapiro’s Kobussen, South Korean companies LG and Sam- Federal Court of Canada to move the Scarlet, while it was sung had ‘major’ exposure, adding, “The Chapter 15 ? ling under arrest, from Prince Rupert to a discharge terminal in de? nitely helped speed things along; we are looking at de- Vancouver with the intention of discharging all of the contain- lays of several weeks – maybe a month, but not months and ers and taking on necessaries. After doing so, it will return to months. There are still vessels on the water; for these, there an anchorage in BC. Assuming that the order is granted, the may be delays of two months,” he said in October. vessel will sail to Vancouver to discharge.” She added, “We

The timing of Hanjin’s descent could not have been worse, do not know yet if Hanjin will make the same proposal to coming during the peak season as retailers stretch supply discharge the Vienna which is owned by German interests.” chains, building up inventories for the end of year shopping The lengthy time-frames were surprising. Chapelski added, rush. Clifford Adler, President of Kurt S. Adler Co., a high “We have been surprised how long it has taken Hanjin and volume importer of Holiday season decorations and orna- the insolvency managers to deal with the ships under arrest in www.maritimelogisticsprofessional.com Maritime Logistics Professional 27I I 18-33 Q4 MP2016.indd 27 11/10/2016 10:31:34 AM