A bankrupt shipping company will be able to pay workers to unload goods from some U.S. bound ships, potentially providing some relief to retailers whose products were stuck in limbo mere weeks before the holiday shopping season.
Attorneys for the South Korea based- Hanjin Shipping said the company got approval from the bankruptcy court in its home country to spend roughly $10 million to unload cargo from four ships that were headed to ports in the U.S., according to an investors update from Teresa Lii, a legal analyst at Reorg Research.
That was welcome news for some U.S. retailers, who have been scrambling to retrieve goods that have been piling up in ports and on vessels ever since Hanjin filed for bankruptcy protection in South Korea last week. The world’s seventh biggest ocean shipper, has been given similar, temporary protection in the U.S., and is seeking such status in dozens of countries to prevent seizure of its assets.
Hanjin’s fiscal troubles have come to a head during peak shipping season for products that will be sold during the holidays, a period in which the retail industry reaps roughly 20% of its sales for the year, according to the National Retail Federation. Hanjin totes roughly 8% of all U.S. cargo.
“The authorization from the South Korean court to pay to service the four ships at U.S. ports should help to start alleviating the situation,’’ says Jonathan Gold, the NRF’s vice president for supply chain.
Still, much uncertainty remains. Nine other ships are currently idling near U.S. ports, according to Lii. And Gold says that there are also goods stuck in port, sitting on board other shipping lines that partnered with Hanjin, and stranded overseas waiting to be loaded onto ships.
“We hope that a further ruling by the U.S. bankruptcy court . .. will provide additional guidance and clarity on how U.S. shippers, including retailers can retrieve their containers,’’ Gold says. “Even when the containers are offloaded, there still appear to be questions about how containers can be retrieved from the ports.’’