Could Christmas 2016 be in jeopardy? It seems like it could be as South Korea’s largest shipping company, Hanjin Shipping, has filed for bankruptcy protection.
It is a move that has seen vessels, sailors and cargo of the company stranded at sea, unable to dock and with no information about docking and unloading procedures.
The ships are being forced to wait for Hanjin Shipping and its creditors to come to a decision about what can and should happen with ships and cargo already in transit. As a result of the uncertainty, ports are refusing to let these ships dock or unload their cargo, for fear they will not get paid.
This is an unusual case, at such a big scale, that is expected to last for weeks or months until something is decided upon. Greg Knowler, maritime and trade analyst with HIS Markit, spoke to the BBC about the situation; “It is a major disaster for the shipping companies and for the companies that own the goods in those containers.”
It is a terrible situation as it is but it is one made all the more devastating for the companies involved as it is now the run up to Christmas. September is the busiest time of year for shipping companies who are carrying stock and merchandise to countries across the world ready for the Christmas period.
However, along with ships and cargo stuck at sea unable to dock, there are containers waiting to be picked up which ports are refusing to let go. They are keeping them as collateral for unpaid bills but even if the ships did collect these containers, they are likely to be immediately repossessed by Hanjin’s creditors.
America has particularly been hit by this situation as cargo, such as electronics, destined for their Christmas stock is left lingering on the ocean or at ports in other countries. It is a situation that has seen suppliers and retailers looking into any other solution available to them in order to keep a good Christmas a possibility and get trade moving again.
As the shipping company enters bankruptcy, it has seen a knock on effect to companies who trade with Hanjin from suppliers, using their ships to transport goods, and ports, who get paid by shipping companies on behalf of suppliers when loading or unloading cargo.
There are also the employees of Hanjin to think about as many of their staff are ship crew members currently stranded at sea with no communication about what they should do. They are unable to dock and have limited food and fuel supplies as well as uncertainty about wages and their jobs when returning to shore.
It is a very complex issue that will affect many companies and people around the world as well as the potentially huge impact it will have on the Christmas period and stock available to retailers.