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2nd Update: Hanjin & GRI

Hanjin:

Hanjin Shipping Co., the world’s 7th largest Carrier Company that has a fleet of 141 vessels of which 128 are operational, filed for receivership last week. This receivership has left approx. 8300 cargo owners in disarray.

As of late Monday, 73 of Hanjin’s ships were seized or denied access to ports, comprised of 66 container ships and 7 bulk carriers, according to Reuters. Hanjin’s membership in the CKYHE has since been suspended. CKYHE shipping alliance, which includes China COSCO, Yang Ming Marine and Evergreen Marine was supposed to start in 2017.

Hanjin vessels were carrying cargo for approximately 8,300 cargo owners, the Korea International Trade Association said on Monday.

In order to unload cargo from ships that are stranded the parent company of South Korea’s Hanjin Shipping Co. said Tuesday that it would raise and spend about $90 million to try to ease a cargo crisis at ports in Los Angeles, Long Beach and around the world caused by Hanjin’s filing for bankruptcy protection. (Jim Puzzanghera, Los Angeles Times)

The Hanjin Group would raise 60 Billion Won (54.7 Million USD), using assets including a stake in a terminal at the Port of Long Beach as collateral. Hanjin Shipping owns a majority stake in Total Terminals International, which operates Long Beach's largest terminal. An additional 40 Billion Won (36.5 Million USD) would personally come from Hanjin Group Chairman Cho Yang-Ho.

This funding is separate from the estimated 100 billion won (91.1 Million USD) loan that South Korean government backed creditors are ready to provide once Hanjin has allocated the collateral for the loan (Vessels, TTI stake, Etc.)

As of September 7th, 2016 Hanjin’s container ships should be able to dock in U.S. Ports. After a hearing Tuesday, U.S. judge John Sherwood agreed to bring Hanjin under the U.S bankruptcy law. This temporarily stops creditors and collectors from seizing Hanjin’s assets in the U.S.

Even though Hanjin’s vessels will be allowed to dock Ports, cargo handlers, truckers, and railways have refused to touch the cargo containers, in fear of not being paid. Lawyers for Hanjin, terminal operators, suppliers and others on Tuesday said they hoped to arrive at

agreements that will address some of these issues in the next few days. Another bankruptcy court hearing on the matter is slated for Friday morning. (Tom Corrigan, Wallstreet Journal)

Adding to the confusion, shippers and brokers have said the Korean government has chosen only three base ports where Hanjin Vessels can be unloaded. These three so called base ports for Hanjin are Los Angeles. Singapore, and Hamburg.

The Korean Shippers Council, which represents more than 60,000 trading companies, said Wednesday its members “have not been able to figure out the whereabouts of their freight.” “Even in those ports, we don’t know who is going to be paying unloading and docking fees,” a broker in Singapore said. “Korea says it will be Hanjin, but Hanjin is telling us it has no money. It’s a total mess.” (COSTAS PARIS and ERICA E. PHILLIPS, WALLSTREET JOURNAL)

Sanne Manders, chief operating officer at California-based freight forwarder Flexport Inc., said rates on Asia-U.S. cargo have risen 40% to 50% since Monday on all sea lanes—not just those operated by Hanjin.

Hanjin Vessels stranded in Long Beach, were allowed to dock at the Port of Long Beach, CA. The Hanjin Greece docked at the Port of Long Beach Saturday after nearly two weeks idled off the coast in the wake of the South Korean shipping lines bankruptcy filing. A Hanjin Shipping spokeswoman in Seoul said at least three more ships—the Hanjin Gdynia, the Hanjin Jungil and the Hanjin Montevideo—were expected to dock at Long Beach after the Greece’s scheduled departure late Monday. (Erica E. Phillips, Wall Street Journal)

The chairman of Hanjin Group transferred 40 billion won ($36 million) to Hanjin Shipping on Tuesday to help unload cargo stranded on the troubled shipper’s vessels, a spokesman said, but regulators warned securing further funds could take “considerable time.” (Reuters, Fortune.com)

GRI:

We have now received notices from multiple Carriers notifying for plans to implement a GRI (General Rate Increase) effective Oct.1 2016. The value of this GRI have not been clearly stated as of yet, but the increases look like they may be significant.

Resulting GRI Due to Hanjin

Given Hanjin’s recently declared bankruptcy as well as the start of Q4 being just weeks away, we’d like to let our customers know that carriers are planning to implement a GRI (General Rate Increase) effective Oct.1 2016. The value of this GRI has not been clarified as of yet, we will notify you on the actual cost increase as soon as possible.

Anti – Zika Mosquito Fumigation Treatment for shipments from The UNITED STATES

Customer Advisory

Require Anti – Zika Mosquito Fumigation Treatment for shipments from The UNITED STATES to SHANGHAI PORTS Per Chinese Authorities, General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ) announcement, the United States has been added to the list of countries for which an anti-mosquito treatment is required for shipments to China Ports. Effective from Aug 03, 2016, US export cargo to China shall be subject to Zika anti-mosquito treatment per AQSIQ announcement. Shipment without mosquito treatment proof or certificate may be subject to treatment at Port of Discharge by the local inspector.

 

 

The situation is still developing and Sea Cargo is monitoring for any new developments. If you have any questions, comments, or concerns, please do not hesitate to contact us.

Hanjin

Hanjin Shipping is the world’s seventh-largest container shipping company worldwide and number one in Korea. Founded in South Korea in 1949, Hanjin is present in 60 countries with approximately 6,000 employees. By the end of June 2016, Hanjin Shipping Co. has filed for receivership Wednesday, August 31st, 2016. 

The company’s debt at the end of June stood at $5.5 Billion.  State-run Korea Development Bank, the company’s main creditor, on Tuesday withdrew its support stating a funding plan by Hanjin’s parent group wasn’t sufficient to tackle the shipper’s debt. The news of KDB’s withdrawal has already severely affected the company’s business.

The vessel Hanjin Rome, was seized in Singapore late on Monday by a creditor, according to court information. Ports including those in Shanghai and Xiamen in China, Valencia, Spain, and the USA have blocked access to Hanjin’s ships. Savannah in the U.S. state of Georgia is the first US Port to have blocked access to Hanjin ships on concerns they would not be able to pay fees, a company spokeswoman told Reuters.

 

Hanjin Shipping’s possible collapse will have severe implications across the liner industry, affecting its CKYHE Alliancepartners, its future THE Alliance partners, slot sharing with other carriers, its charter contractors and countless shippers with cargo moving on major trades on its 98-ship fleet. (Greg Knowler Senior editor for Asia for the JOC)

This collapse is said to be greater than the 1986 collapse of United States Lines in terms of capacity, according to consultancy Alphaline.

South Korea’s oceans ministry estimates a two- to three-month delay in the shipping of some Korean goods that were to be transported by Hanjin Shipping, and plans to announce in September cargo-handling measures which could include Hyundai Merchant Marine taking over some routes, a ministry spokesman said on Wednesday.

 

Hanjin’s unfortunate circumstance is likely to lead to rate increases for both imports and exports in the near future. We will update our customers of these increases as soon as possible.

Flat Rack Trailers & Pier Pass Notice

 

Flat Rack Trailers & Pier Pass Notice

SCI Education Center: Flat-rack Containers

Flat-rack containers (AKA flatbed trailer) are typically used for road transportation of various nonstandard and over-sized freight.  A flat rack is a flat platform with collapsible side walls at either end of the platform that allows over-width and over-height cargo (OOG). The flat racks are versatile in that they can be loaded onto a standard chassis or a specialty trailer (Lowboy, Step-deck, etc.) that will allow cargo additional height over the road. Load cargo onto flat racks allows for specialty cargo to be lifted on and off Trains, Trucks, & Vessels without directly attaching to the equipment decreases the risk of damage. Some standard cargo that is typically loaded onto flat racks includes lumber, pipe, plywood, rebar, and steel as it allows for easier loading which reduces cost and the risk of damage to the product & container.Flat racks are also ideal for loading machinery, construction equipment, and multiple tractors which can minimize shipping costs and make it feasible to load larger pieces of equipment that cannot be broken down into a container. 

Flat racks do have disadvantages such as cargo exposure while in transit (although this can be minimized if cargo is stowed below deck). It should also be noted that when shipping oversized cargo on flat-racks, no cargo can be placed above the flat-rack while on a vessel. This means that the cost is usually higher to ship cargo on flat racks since the space above the flat rack cannot be utilized by other cargo. When flat rack cargo is overly wide, the price to ship increases substantially since the container cell spaces on the left and right sides of the flat rack will no longer be able to accommodate other containerized cargo.  See graphical example:

 

Normal Container [standard container]

unit 4

unit 2

unit 6

unit 3

Your Container [standard]

unit 5

     

Over Height Flat-rack

unit 3

N/A

unit 5

unit 2

Your Container [out of gage]

unit 4

     

Over Height & Over Width Flat-rack

N/A

N/A

N/A

N/A

Your Container [out of gage]

N/A

     

Your container or Flat-rack

Other Cargo / Containers

Empty Space due to your Flat-rack

 

Sea Cargo Inc. has a network of highly experienced loaders that can assist or handle all types of flat rack projects please contact our team with any information about your project and we would be happy to make any move simple.

NOTICE TO PIERPASS DIRECT PAY CUSTOMERS

Effective August 8, 2016, the Traffic Mitigation Fee (TMF) will increase to $70.49 per TEU and $140.98 per FEU.  Please see the attached Press Release dated July 8, 2016.

 Direct Pay accounts claiming and paying for Import Containers prior to the rate increase will still be responsible for the entire new fee if the containers move on or after August 8, 2016.

If an Import container is claimed/paid for at the current rates of $69.17 TEU /$138.34 FEU but moves during Peak hours on or after August 8, 2015, then an additional $1.32/TEU or $2.64/FEU will need to be paid after the move.

 Containers may be claimed at the new rate after close of business (6pm PDT) Friday, August 5, 2016.  Do not attempt to unclaim and reclaim unmoved Import containers claimed prior to 6pm on August 5th as this could prevent the container from being released on or after August 8th. To minimize the administrative burden, we recommend that you delay claiming/prepaying containers until after 6 pm on Friday, Aug 5th for containers anticipated to move on or after August 8, 2016. 

Our Customer Service Center representatives will contact you after August 8th to resolve any balance(s) due. 

Direct Pay Exports will be billed based on the fee rate in place at the time of the gate transaction and do not require prepayment.

 http://www.pierpass.org/wp-content/uploads/2016/07/TMF-adjustment-2016-release_7-8-16_final.pdf

 

 

 


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