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.
