Plan to Ease Cargo Crisis at Ports Due to Hanjin Bankruptcy Hangin

Plan to Ease Cargo Crisis at Ports Due to Hanjin Bankruptcy

Hanjin Shipping Co. said on Sept. 6  that it would raise and spend about $90 million to try to ease a cargo crisis at ports in Los Angeles and Long Beach.

On August 31, Hanjin Shipping Co. lost its funding which left its ships stranding outside ports around the world.

One state particularly hard hit was California as Hanjin accounted for about 4% of container cargo imported to the Port of Los Angeles and 12% of container cargo to the Port of Long Beach during the first six months of the year, according to Datamyne, as reported by the Los Angeles Times.

The bankruptcy is a result of overcapacity in the industry which is due to a slowdown in global trade.  A further factor, says the Los Angeles Times, is a massive ship-building boom.

But the congestion should ease at the company of South Korea’s Hanjin Shipping Co. said  on Sept. 6  that it would raise and spend about $90 million to try to ease a cargo crisis at ports in Los Angeles and Long Beach.

Reports say that Hanjin Group would raise 60 billion won, using assets that include a stake in a cargo terminal at the Port of Long Beach as collateral. Hanjin Shipping, the world’s seventh-largest container carrier, owns a majority stake in Total Terminals International, which operates Long Beach's largest terminal.An additional 40 billion won would personally come from Hanjin Group Chairman Cho Yang-Ho.

The goal is to “normalize” operations by Hanjin Shipping and “minimize damages on export companies,” according to a statement from Hanjin Group.

For more details on effect of congestion see original article. 

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