Minimize the damageThe Hanjin Shipping crisis has reached a critical point. Due to poor crisis management from the government, a corporate disaster has built up to a national problem. Over $14 billion worth of cargo is stranded at sea. The government has brought international shame to Korea by dumping the country’s largest shipping company in the hands of the court without studying the repercussions.
The company’s woes have turned into international issues because 90 percent of the cargo is owed by clients around the world including the two largest markets, the United States and China. U.S. retailers and manufacturers are dumfounded by possible delays in deliveries by Hanjin Shipping ahead of the Black Friday shopping season. They urged U.S. and Korean authorities to help solve the crisis as they are under the risk of losing market competition because of stocking issues.
Actions came from other places. While the government and Hanjin Shipping foundered, the bankruptcy court in Seoul issued an injunction, prohibiting sales of Hanjin’s operation rights in eight routes in Asia. A delegation from the U.S. Commerce Department came to Seoul to demand action from the government.
A U.S. bankruptcy court accepted petitions from their Korean counterpart and ordered court protection for Hanjin Shipping vessels and cargoes at U.S. ports. Samsung Electronics filed a petition of its own to the U.S. court, offering to pay for the port services fees on behalf of the Korean carrier to protect its cargoe.
The blame-game should be put on hold to jointly address the crisis. The deputy prime minister for the economy must step up to control the matter. The government must form a joint task force with Hanjin Shipping to normalize the cargo operation first.
The government and lenders must arrange emergency loans and Hanjin Shipping should do whatever is required to appease the apprehensions of its customers at home and abroad. The immediate catastrophe must be solved first to minimize the damage on the industry and trade front.
JoongAng Ilbo, Sept. 12, Page 30