As previously detailed in our Supply Chain Alert, Hanjin Shipping, the world’s seventh-largest container shipper, filed for bankruptcy protection on August 31. Hanjin’s collapse is by far the largest container shipping bankruptcy in history and the consequences continue to reverberate throughout international supply chains and the transportation sector.
Although Hanjin is not among MIQ’s core carriers, we do have cargo caught up in this situation because of vessel share agreements by our core-carriers and shipper-specific arrangements. Our immediate task, therefore, is to obtain cargo release; mitigate any extra costs and expenses; and, deliver our clients’ cargo.
CURRENT STATUS
On September 6, 2016, the Bankruptcy Court for the District of New Jersey issued a blanket stay of collection or enforcement efforts against Hanjin or its assets in the U.S. Three days later the Court established a protocol for cargo interests to claim their cargo from Hanjin or third parties such as terminal agents, warehousemen or others. Unfortunately, the protocol does not address all of the issues. In order to protect our clients, reduce excess charges, and streamline the release process, we have retained counsel jointly with other NVOCC’s to file a motion with the Court seeking clarification. Specifically, our motion will ask the Court to clarify the protocol to avoid duplicate payments; prevent third parties from charging extortionate rates; and, to obtain the release of cargo without violating the bankruptcy court’s interim order.
RELEASE AGREEMENTS AND HINDRANCES AFFECTING PERFORMANCE
MIQ will seek to deliver cargo at the quoted rates, but Hanjin’s bankruptcy adds several levels of complexity. The release protocol established by the Court requires us to pay Hanjin the full freightage less any amounts paid to a third party at the regular Hanjin contract rates, unless Hanjin has already paid the Terminal Operator. There are several problems with the protocol: Hanjin must timely provide either the contract rates or, the proof of payment and, the Third Parties must agree with the facts asserted by Hanjin.
We anticipate situations where, in addition to paying the full ocean freight charges to Hanjin, we must choose either to delay cargo delivery awaiting the required information and Third Party agreement or, pay both Hanjin and the Terminal Operators, Cargo Transportation Carriers or other Third Parties to release and deliver the goods. Unless directed otherwise in writing, we will always choose to deliver the goods in accordance with the MIQ Bill of Lading and invoice the full freight in addition to extra costs and net expenses resulting from the circumstances referred to above.
Please visit our Hanjin Bankruptcy page for current information on the topic.
For additional information, please contact your local MIQ Logistics representative.