Hanjin seeks to steer its ships to Singapore, Hamburg, Busan

Singapore

SOUTH KOREA said that Hanjin Shipping Co will try to steer vessels to ports to unload cargo as the government attempts to contain global supply-chain disruptions that are stemming from the container line's court receivership filing. The shares jumped after Yonhap News Agency reported that the government will offer loans to the company.

Hanjin's ships will make calls at ports including Singapore, Hamburg and Busan, South Korea, where its vessels are unlikely to get stranded, Deputy Finance Minister Choi Sang Mok said in Seoul on Monday.

Regulations at these sites make them less likely places where the ships can get stuck, Mr Choi said. The Financial Supervisory Commission said that 79 of Hanjin's vessels, including 61 container ships, have had their operations disrupted.

"The government is trying to extinguish the most immediate fire," said Kim Tae Il, a research analyst at the Korea Maritime Institute in Busan. "This is going to help ease some of the bottlenecks in the supply chain. So those toys held up in container boxes will be able find their way to consumers."

South Korea's largest container shipping line is seeking stay orders in 43 countries to protect its vessels from being seized due to legal actions by creditors following the court receivership filing last week that stranded cargo liners in mid-voyage and roiled companies' supply chains before the year-end shopping season. Offloading the containers may help customers such as LG Electronics Inc get their televisions and other cargo back on land and book the products onto other ships or for transport by land.

South Korea's ruling Saenuri Party and the government will offer Hanjin Shipping 100 billion won (S$122.6 million) of loans, Yonhap reported on Tuesday, without citing anyone. Hanjin Group, owner of the shipping line, is in discussions with Hanjin Shipping's main creditor, Korea Development Bank, about providing financial aid and collateral, the Asia Business Daily newspaper reported, citing the group.

Shares of Hanjin Shipping jumped 21 per cent to 1,295 won in Seoul trading in the morning. The stock has plunged 65 per cent this year, cutting its market value to 315 billion won.

"Given the vast amount of cargo and value remaining on the vessels, Hanjin's administrators will have to do all they can to get the ships into ports, as they have to avoid additional claims against Hanjin for delays and possible damages," said Harald von Seydlitz-Kurzbach, managing director at Bremen, Germany-based Reck & Co, which is part of the Lloyd's Agency Network representing cargo interests in legal disputes.

Eurogate, Hamburg's second biggest container terminal operator, informed customers on its website that cargo handled under contract with Hanjin "will only be granted against a cost assumption declaration and payment of all costs". Spokeswoman Corinna Romke declined to comment further.

Larger operator Hamburger Hafen & Logistik AG, which handles three out of four containers passing through Germany's biggest port, is closely monitoring the situation, said spokesman Torsten Engelhardt.

All companies involved in serving Hanjin vessels, such as fuel and food suppliers, will most likely demand advance payments and guarantees before continuing cooperation, Mr Seydlitz-Kurzbach said. On the other hand, Hanjin's large clients will want to avoid a complete collapse of the company and "are keen to get their cargo off the ships ahead of the Christmas season", he added. BLOOMBERG