US retailers seek government help ahead of Holidays following South Korea’s Hanjin Shipping failure
With the critical Holiday season fast approaching, US retailers have asked the government to step in and help resolve a growing crisis caused by the near-collapse of South Korea’s Hanjin Shipping Co, one of the world’s largest container shipping companies.
Those most likely to be affected include Wal-Mart Stores, Target Corp, JC Penney Co, and a host of clothing retailers.
A Target spokeswoman told Reuters the retailer is watching development closely and assessing the situation.
Marilee McInnis, a spokeswoman for Wal-Mart, also told the newswire: “Right now, we are waiting to hear the final determination on bankruptcy proceedings and the implications to their current assets before we will be able to assess any impact.”
According to a letter to the Department of Commerce and the Federal Maritime Commission, president of the Retail Industry Leaders Association Sandra Kennedy wrote: “While the situation is still developing, the prospect of harm is significant and apparent.”
Hanjin’s recent bankruptcy filing “presents an enormous challenge to US shippers,” she said, and “could have a substantial impact on consumers and the economy at large.”
The trade group is urging the US to work with ports, cargo handlers and the South Korean government to resolve the widespread disruption in freight shipments caused by the Hanjin bankruptcy filing.
Hanjin handles about 7.8% of the trans-Pacific trade volume for the US market, Kennedy’s letter said.
Since the shipping company filed for bankruptcy protection in a Seoul court Wednesday, terminal operators, ports, cargo handlers, truckers and others have refused to handle its cargo, for fear they won’t get paid. That is causing turmoil at US ports and beyond, said shippers, importers and freight forwarders.
Freight brokers in Asia said about 540,000 containers are expected to face delivery delays that could range from a few days to more than a month.