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When the now infamous Hanjin filed for bankruptcy at the end of August, it also left freight worth $14 billion marooned at sea ports and offshore waters across the world.
Vietnamese seafood exporters said some of their cargo has been caught in the middle of this massive fallout.
The Vietnam Association of Seafood Exporters and Producers estimated that about 150 containers of frozen seafood due to reach the U.S. by the end of this month are affected.
Now that Hanjin ships have been refused to offload or take abroad merchandise at many sea ports around the globe, there's no guarantee that those containers of Vietnamese seafood could be delivered to importers and retailers on time, the association said.
Tran Kim Yen, director of the freight forwarding company NYD Logistics, said as many as 20 Hanjin consignments which have arrived in Malaysia, Singapore or South Korea are not likely to reach their final destination.
Yen said any solution to this problem will add extra costs.
“We are paying up to $80 a day for a container sitting in Singapore,” she explained. "It will cost an estimated $4,000 for a container to be shipped back to Vietnam, or $7,000 for a container to continue its journey to Europe."
For companies exporting relatively low-value products, the price of completing the journey would be too much.
Dang Phan Phuong Chi, executive manager of An Huy BT, a shipping company, said Vietnamese exporters are on the horns of a dilemma, facing a tough choice between finishing the route and heading back to Vietnam.
She said, for instance, more than 140 containers of livestock feed trapped in Hanjin ships are waiting at a port in Busan, South Korea. It could cost around $5,000 per container, exactly the value of the goods inside, for a return trip to Vietnam.
In the meantime, a Hanjin vessel -- the Hanjin Chennai -- has been stranded for days off the coast in southern Vietnam as it was refused permission to enter a port in Vung Tau. There are concerns about whether the failed shipping line could pay docking and other fees.
All at sea
After having filed for bankruptcy in August, the world’s seventh-largest container carrier lacked cash to pay cargo handlers, tug operators or ports, leaving ships adrift and containers stuck in a limbo state.
As many as 733 containers of merchandise handled by the Hanjin Chennai were scheduled to dock in Ho Chi Minh City on September 2. They of course have not arrived.
There were also reports that some Hanjin ships had been seized in China on behalf of creditors.
Customs statistics show that the South Korean shipping line has run up a debt of about $2.5 million to Ho Chi Minh City-based Saigon Newport Corporation, and more than $200,000 to other ports in the north.
Some said Saigon Newport should ask for help from relevant authorities to order the Hanjin Chennai to dock in southern Ho Chi Minh City so that retailers and companies can offload their cargo while creditors can seize some assets.
However, Bui Thi Lien Thuy, director of HabaSped Logistics, said that is not a good solution.
“The Hanjin Chennai will continue to remain at sea as long as we refuse to protect the ship and its cargo from being seized by creditors, or to promise that the ship is free to leave afterward,” said Thuy.
She added that the longer the wait, the longer local importers and retailers will suffer.
A Ho Chi Minh City-based importer of fresh food said following Hanjin’s filing, its imports are now three weeks behind the delivery deadline and still nowhere to be found.
“Food products with a short shelf life can easily go off... We feel like we're on the edge of a cliff,” said a representative.
Ha Xao Chau, who runs a porcelain business, said her company had to compensate customers for late deliveries, but there's also damage to its reputation.
“We have no choice but accept the financial losses. What we are concerned the most is exactly when our goods will be here," said Chau. "The delay so far has seriously affected the business of our local partners.”
According to the Vietnam Maritime Administration, Hanjin accounts for over 5 percent of Vietnam’s container shipping industry.
The operator, with nearly 100 container ships, said it has faced an acute credit crunch following the 2008 global financial crisis.
The economic downturn has taken its heavy toll on the shipping industry, which is suffering from a record low freight demand amid chronic overcapacity.
The South Korean government said the Korea Development bank will offer a credit line of 50 billion won, or $45 million, to help the shipper offload cargo.
Korean Air, the shipping line’s largest shareholder, has also agreed to lend 60 billion won to pay for the unloading of cargo of dozens of ships still stranded at sea.
The bankruptcy of Hanjin has badly hurt many Vietnamese companies across industries, especially those exporting seafood, garment and textile, footwear and furniture to the East Asian markets and the U.S.
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