The Hanjin Effect: Equipment Shortages & How Milestone is Here to Help
In response to the Hanjin Shipping bankruptcy, Milestone continues to offer an expansive fleet to minimize disruption for customers. Please find the latest news regarding this matter below.
An excerpt from Reuters:
The bankruptcy of Korea’s Hanjin Shipping Co Ltd (117930.KS) is causing ripple effects for importers bringing goods from Asian factories to U.S. malls by creating a shortage of trailers to move ocean-shipping containers on U.S. roads.
The world’s seventh-largest container carrier has more than 500,000 containers, and many already are clogging up ports and truck yards, tying up trailers that cannot be used to handle other cargo. That is beginning to worry freight handlers at U.S. West Coast ports and is the first sign of knock-on effects from the failure of Hanjin.
The problem stems from Hanjin’s shortage of cash, which has stranded $14 billion of cargo owned by companies such as HP Inc (HPQ.N), Home Shopping Network (HSNI.O) and Samsung Electronics Co Ltd (005930.KS). Much of the cargo is on more than 100 ships at sea because cargo handlers, tug operators and ports are refusing to work with Hanjin unless they get paid up front.
A lawyer for the shipper did not immediately respond to a request for comment.
Terminal operators in the California ports of Long Beach and Oakland are not taking back empty containers. Many in the industry doubt Hanjin will pay storage costs, and a growing number of empty containers and the trailers they sit on are stranded.
“If it’s not fixed in the next couple of weeks, I think you’ll see a huge ripple effect across the industry,” said Weston LaBar, executive director for the Harbor Trucking Association in Long Beach, California.
LaBar said there are thousands of Hanjin containers on trailers out of circulation, and the uncertainty surrounding Hanjin appears to be pushing truckers to lock in trailers from his organization’s pool.
“We doubled in bookings this morning,” LaBar said. “We have availability, but we’re getting to the point where we may be leased out for our chassis.”
Shipping executives said there is ample supply of shipping containers, but trailers are limited. The West Coast ports previously have experienced brief shortages even when the stream of trade is functioning normally.
The Hanjin collapse has exacerbated the problem.