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(LEAD) Hanjin Shipping's sinking deals blow to cargo exports

All News 15:42 September 01, 2016

(ATTN: ADDS more details in last 2 paras)

SEOUL, Sept. 1 (Yonhap) -- Hanjin Shipping Co.'s receivership filing is sending ripples through the country's cargo exports with some vessels of the country's top shipper denied entry to the No. 1 port here and its clients struggling to find alternatives for their shipments, industry sources said Thursday.

On Wednesday, the world's seventh-largest container operator filed for court protection after its creditors ended financial support.

The sources said Hanjin Shipping's container vessels are denied access to the port of Busan in the southern part of the country, and container lashing providers refused to work with Hanjin Shipping container boxes out of concerns that they would not be paid.

Hanjin Shipping accounts for roughly 10 percent of cargo processed at Busan port, the country's largest seaport.

Also, a container ship run by Hanjin Shipping was ordered to stand by instead of anchoring at a local port. The ship was set to ship electronic goods overseas, the sources said.

Currently, Hanjin Shipping accounts for some 40 percent of Samsung Electronics Co.'s cargo shipment, with the comparable figure for LG Electronics Inc. being some 20 percent.

Usually small-sized electronic devices such as mobile phones and semiconductors are shipped by air, but big-sized goods such as home appliance are carried by sea.

Clients are also searching for alternative ships for the shipment of their goods as Hanjin Shipping's vessels are feared to be seized by its creditors.

Hanjin Shipping said earlier one of its container vessels was already seized in Singapore by a creditor, and a slew of its ships are denied entry to ports in China, the United States, Canada and other nations.

The country's maritime ministry said earlier that it will work to help smooth out flows in cargo trade for the local exporters and importers by putting in substitutes for Hanjin's vessels which may be seized.

The ministry estimated that the process of a total of 540,000 twenty foot equivalent (TEU) containers may be delayed, and shipping goods to foreign countries may be difficult for the next three months.

Meanwhile, Hyundai Merchant Marine Co., the country's No. 2 shipper, plans to add 13 ships on routes to the American and European regions in order to replace Hanjin Shipping's capacity.

Hyundai Merchant Marine, currently under a creditor-led debt restructuring scheme, may seek to take over Hanjin Shipping's healthy assets, such as port terminals and global business networks.


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