LOS ANGELES/SINGAPORE (BLOOMBERG) - Three vessels belonging to Hanjin Shipping Co, the distressed South Korean container shipping company, were stranded off the US West Coast, Kip Louttit, executive director of the Marine Exchange of Southern California said.
Large container ships that come within 20 miles of the port complex owe the exchange fees of as much as US$1,000, while harbor pilots and tug-boat operators also receive payments for their services to incoming vessels, Mr Louttit said in a telephone interview, without elaborating on the reason for the status of the Hanjin ships. The Marine Exchange of Southern California directs traffic in the San Pedro Bay, which is shared by Los Angeles and Long Beach ports.
Hanjin Shipping filed for court protection on Wednesday in Seoul after lenders rejected its restructuring proposal, scuttling revival efforts by the firm that's been trying to reschedule debt under a voluntary creditor-led program since May. Hanjin's woes reflect those of an industry that's been operating at a loss since the end of 2015, and set to lose about US$5 billion this year amid an oversupply of vessels, according Drewry Maritime Research.
"It's going to be interesting to see how this plays out," Mr Louttit said. The ships, from South Korea, China and Japan, were bound for the Los Angeles-Long Beach port complex, the largest in the US.
A labor union in South Korea's Busan port, refused to work on a Hanjin container vessel because the company hasn't paid dues, a person familiar with the situation said, asking not to be identified, citing policy. Berthing of the ship had to be canceled as a result.
Mr Louttit said he wasn't aware what the US-bound ships were carrying, though some of the cargo could be time-sensitive with warehouses loading up for holiday sales. Still, the three marooned off the coast represent less than 1 per cent of the ship traffic in Los Angeles and Long Beach in August, he said.
Hanjin Shipping is part of Hanjin Group, which also owns Korean Air Lines Co., the world's third-largest cargo airline. Korean Air loaned funds to Hanjin Shipping and bought shares in the container line in 2014 to become the biggest shareholder with 33 per cent. The group, which also counts airport services, logistics and mineral water among its businesses, is headed by chairman Cho Yang Ho.
Korean Air said in an exchange filing on Wednesday that losses on its investments, including loans and an equity stake in the container shipping line, will be as much as 383.3 billion won (S$466.7 million).
Hanjin is among shipping lines grappling with a slump in global trade since the 2008 financial crisis and the slowest pace of economic growth in China in a quarter century. The container line had debt of 6.1 trillion won (S$7.43 billion)at the end of June, according to its first-half earnings report.