Update on Hanjin Bankruptcy Procedures
Thursday, September 8, 2016
Posted by: Kathleen Chaplick
Since last year's Port Disruption due to work slowdowns at the Port of Los Angeles, JPMA has been actively working as part of a broad coalition focused on issues that impact member companies' businesses as it relates to shipping and receiving goods. The National Retail Federation spearheads such efforts. This is a periodic update for members.
Department of Homeland Security:Here is a copy of a letter from the Department of Homeland Security, signed by Alan Bersin, Assistant Secretary for International Affairs and Chief Diplomatic Officer, in response to our coalition letter on the Request for Information - Strategies to Improve Maritime Supply Chain Security and Achieve 100% Overseas Scanning.
Here is a copy of the coalition letter which had over 100 associations signed on.
Hanjin Bankruptcy: Hanjin Shipping, the world’s seventh-largest container shipping company worldwide, declared bankruptcy last week causing untimely chaos in the shipping supply chains.
While the situation has been developing, here are some key points to know right now:
- The U.S. Bankruptcy Court granted temporary Chapter 15 bankruptcy protection for Hanjin. This means vessels and other assets won’t be seized. However, transportation providers (terminal operators, drayage drivers, etc.) are charging cargo owners for the release of Hanjin containers.
- The Federal Maritime Commission (FMC) posted procedural information for shippers and other stakeholders to file allegations of Shipping Act violations or requests for assistance related to retrieving or receiving cargo in transit. See below.
Federal Maritime Commission (FMC) Guidelines
All correspondence should include "URGENT—HANJIN SHIPPING" in the subject line. The Commission continues to monitor the operational and competitive impacts of this disruption and is particularly interested in learning of any conduct by any regulated entity that may violate the Shipping Act. Members of the shipping public are encouraged to share with the agency any specific allegations of illegal behavior.
When writing the Commission on this matter, the following information should be provided:
- Name (If you are assisting someone else, also provide his/her name(s) and your relationship)
- Company Name(s), if applicable
- Contact Information and/or Representative(s) (phone, fax, address including zip code, and email, if available)
- Name of Person or Company with whom you are having the problem
- Contact Information for that Company or Party, including Individual's Name(s)
- Your request should also include:
- A full description of the matter (including a description of any attempts already made to resolve the problem)
- Your desired solution
- All relevant documentation (e.g., contract, bill of lading, proof of payment, bookings, Order for Service, invoice for the services, emails about the issue, dock receipts, arrival notices, invoices, terminal appointments, terminal operating hours/stoppages, etc.)
- A description of the cargo
- The ports of origin and destination (including terminal, railramp, etc.)
- The date of shipment or sailing
Emails will be referred to the appropriate office with the Federal Maritime Commission for review and assessment of any potential agency action.
U.S. Customs and Border Protection issued Guidance on Vessel Diversions for Hanjin Shipping Lines Cargo on September 2, highlighting processing scenarios to help trade and CBP identify procedures to follow to prevent disruptions.
South Korea's government has said it might provide Hanjin with loans to keep the bankrupt shipping giant afloat. Officials said Seoul could give 100bn won ($91m; £68m) or more in long-term funding at low-interest rates if Hanjin provided the necessary collateral.The immediate problem, though, is the company's ships out at sea because ports say they won't accept them without being sure that port-fees will be paid.