Solutions first, pleaseThe trade front has been rocked by the insolvency of the country’s largest cargo carrier. The fleet of Hanjin Shipping carrying Korean products to markets around the world has been detained after the shipper was placed under court receivership, taking a toll on the country’s exports.
As of Sunday, 73 out of 141 active Hanjin carriers have not been operating normally. They have been denied entry and leave and cargo cannot be unloaded because the shipper has been overdue in payment for port use and services. Some ships have been seized. As many as 300,000 containers are affected, of which 33,000 carry products of Korean origin.
Delays would impact delivery schedules and cause defects in the products. The cost would have to be shouldered by exporters. There are another 300,000 containers that need to be shipped out. If the matter is not addressed quickly, the country’s exports front would be shaken by a logistics crisis.
The government and creditors are at fault for their nearsightedness. Creditors assured that the insolvency of Hanjin Shipping wouldn’t have an impact on the economy because the company accounts for 2 percent of Korea’s cargo trade. The government promised to designate 13 Hyundai Merchant Marine vessels to handle the cargoes of Hanjin Shipping last week. But that would only be possible later this week due to insufficient preparation. We doubt if they can be trusted to spearhead industrial restructuring with such poor insight and crisis control skills.
We also cannot comprehend Hanjin Group. The parent group of Hanjin Shipping declined to attend a government-led emergency meeting on the shipper. Even as it had given up on the shipping unit, it has not adjusted the shipment volume and schedule. Because it applied for a stay order in overseas courts too late, the shipper failed to prepare ahead for seizure and port disruptions.
Yet the concerned parties are busy pointing fingers instead of trying to come up with solutions. The financial services commission chief said that Hanjin Shipping has not been cooperative in sharing its shipping schedule and urged the shipper to solve the matter. Hanjin Shipping claims it had not received orders from the government or creditors.
At the current rate, Hanjin Shipping could be completely ruined before the court administration program can start. There won’t be any assets or a sales network left to save. The company’s credibility would have hit the bottom. Real action must take place fast.
JoongAng Ilbo, Sept. 6, Page 34