Retailers scramble to work around Hanjin Shipping bankruptcy
RetailDive.com - Sep 5th 2016, 09:31
Retailers are working to minimize the fallout from the bankruptcy of South Korea's Hanjin Shipping, the world’s seventh-largest ocean shipper by capacity, the National Retail Federation said Thursday.
Hanjin Shipping filed for bankruptcy protection Wednesday, disrupting supply chains just as retailers are preparing for the all-important holiday shopping season. The situation is now being handled in South Korean court, and the government there says it will help prop up Hanjin.
Hanjin is part of an alliance of six shipping companies, which complicates the problem even further, according to the Wall Street Journal. Trucking and railroad companies (especially those heavily dependent on moving the shipper’s cargo from U.S. ports) are wary, further complicating the matter, and some 540,000 containers may see delivery delays ranging from a few days to more than a month, freight brokers in Asia said. Shipping rates have soared as a result, increasing to $2,300 per container by Thursday, up from $1,700 four days earlier.
“Retailers’ main concern is that there is millions of dollars worth of merchandise that needs to be on store shelves that could be impacted by this,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said in a statement Thursday. “It is understandable that port terminal operators, railroads, trucking companies and others don’t want to do work for Hanjin if they are concerned they won’t get paid. However, we need all parties to work together to find solutions to move this cargo so it does not have a broader impact on the economy.
Gold admitted that there are more questions than answers at this point, but said retailers are working to address the matter, "working with all of their service providers to find ways to get their cargo moving to ensure that there is no or limited interruption in the supply of merchandise."
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