Hanjin able to unload 95.5% of its stuck cargo

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Hanjin able to unload 95.5% of its stuck cargo

Hanjin Shipping finished unloading 95.5 percent of the cargo on its ships worldwide as of Monday, the government said.

According to the Ministry of Strategy and Finance, a total of 94 container vessels out of 97 finished unloading and the rest are expected to finish in the near future.

A total of 52 cargo vessels were unloaded overseas and 42 were unloaded in Korea.

Hanjin’s outstanding shipping orders are the equivalent of 396,000 twenty-foot equivalent units (TEU), or containers. The government said the company has completed delivering 95.5 percent of those, or 378,000 TEUs. On the top of 18,000 TEUs still at sea, 35,000 TEUs of unloaded cargo are waiting to be claimed by owners.

“Hanjin needs to deal directly with owners of goods and shipowners to finish delivering the remainder,” said Choi Sang-mok, vice minister of strategy and finance at a press briefing held at the Central Government Complex in Seoul on Tuesday. “However, the government plans to fully cooperate with port authorities overseas so that Hanjin can deliver goods as early as possible.”

As of Monday, the government has spent some 344.5 billion won ($303.4 million) to help companies that did business with Hanjin Shipping get their deliveries.

It promised to continue financial and legal assistance to the shipping industry to minimize the impact of Hanjin’s insolvency and the ongoing restructuring of the shipping industry.

When asked about the fate of the company, Vice Minister Choi said it is out of the government’s hands since the company is going through court receivership. “The court will decide the fate of the shipper but the government will continue to push forward recently announced plans to help struggling shipping and shipbuilding industries in the meantime.”

For shipping companies, the government announced 6.5 trillion won worth of financial support, including a program to help them secure new ships.

Meanwhile, government officials, professors from academia and heads of major shipping companies gathered on the same day at the National Assembly to discuss solutions to the Hanjin and shipping industry crisis. The discussion was led by opposition Minjoo Party lawmaker Song Young-gil.

“We have to find a new paradigm in the shipping industry different from that of overseas shipping giants like Denmark’s Maersk,” said Jeon Jun-su, a business professor at Sogang University. “Endless price wars have shown their limits and it’s not the best option for Korea’s shippers to build bigger ships in a hurry as in the past.”

Jeon suggested that while the global shipping industry has been suffering from an overcapacity of ships, Korean shippers need to walk away from the price war and compete on service quality instead.

“Korean shippers should form a new ‘business class’ by building high-speed, high-efficiency and eco-friendly ships to deliver cargo at an on-time rate of 90 percent and target niche markets where cargo owners are sensitive to higher-quality shipping services,” Jeon said.

The practicality of the government’s 6.5 trillion won worth plan was also discussed.

Jeon said there should be a binding system to make the plan continue even after the current administration changes. The 6.5 trillion won plan includes expanding a shipbuilding fund from its current 1.3 trillion won to 2.6 trillion won and expanding the range of ships subject to funding from large containerships to bulk vessels and tankers.

Cho Kyu-yeol, executive director at the Export-Import Bank of Korea, cited the importance of the nation’s shipbuilding and shipping industries to find a virtuous business cycle so the funding of the shipping industry could increase orders for the nation’s shipbuilding industries, which would again lead to quality service from shippers.

“The government and the public need to understand the business mechanism of the shipping and shipbuilding industries,” Kim Young-moo, executive vice chairman of the Korea Shipowners’ Association said. “Recovery of the shipbuilding sector is only possible through the recovery of shippers since they ultimately are the ones ordering ships.”

Kim added that the government has been less supportive to the shipping sector while pouring in several trillion won of funding to the shipbuilders from the beginning of the year.

“We welcome the recently proposed support plan for the shipping industry, but I do hope that the plan is maintained even after another administration takes over,” Kim said.

The day’s discussion was not free from ongoing speculation that President’s Park Geun-hye’s close aide and confidante Choi Soon-sil was behind the collapse of Hanjin, the nation’s No. 1 shipping company.

Hanjin Group Chairman Cho Yang-ho donated a billion won to the Mi-R Foundation, a nonprofit allegedly connected to Choi Soon-sil, and there are views that Hanjin was forced into court receivership and not bailed out by the government because it didn’t donate more.

“I met with Hanjin Group Chairman Cho Yang-ho recently and asked if he was on bad terms with the president,” lawmaker Song said. “Cho was careful with his words but it seemed as if he had been pushed out from his position as chief of the organization committee for the 2018 Pyeongchang Winter Olympic Games.”

Vice minister Choi, however, denied rumors about the Choi’s influence on Hanjin.

“The government has repeated numerous times that Hanjin failed to meet requirements to stabilize their management such as by carrying out management turnaround plans,” said Choi.

“I would like to emphasize once again that the Choi scandal has nothing to do with Hanjin.”

BY KIM YOUNG-NAM, KIM JEE-HEE [kim.youngnam@joongang.co.kr]
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