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  September 2nd, 2016 | Written by

Retailers Want Federal Action to Prevent Cargo Disruptions

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  • Federal action urged to keep cargo flowing.
  • Bankrupt Hanjin represents 7.8 percent of U.S. transpacific trade.
  • Nightmarish cargo picture in wake of Hanjin collapse.

In a letter sent yesterday, the Retail Industry Leaders Association (RILA) urged action in response to the bankruptcy of Hanjin, a major South Korea based shipping company, to ensure the flow of cargo to and from the United States.

Specifically, RILA asked U.S. Secretary of Commerce Penny Pritzker and Federal Maritime Commission Chairman Mario Cordero to use their powers to work with stakeholders to resolve the developing situation.

“While the situation is still developing, the prospect of harm is significant and apparent,” said RILA President Sandy Kennedy. “We urge that Department of Commerce and the Federal Maritime Commission work together with all stakeholders, including ports, cargo handlers and the South Korean government, to resolve the immediate disruption and mitigate the harms posed by the current situation.”

Hanjin Shipping, which represents around 7.8 percent of the transpacific trade volume for the U.S. market, filed for bankruptcy earlier this week after creditors rejected a self-rescue plan. The carrier is carrying $5 billion in debt.

The RILA letter painted a nightmarish picture of the developing implications of the Hanjin collapse.

“The impact on importers and exporters is having a ripple effect throughout the global supply chain,” said the letter. “U.S. bound cargo is already being delayed at origin ports and Hanjin ships loaded with cargo idle, unable to enter U.S. ports, and containers are being detained on arrival clogging already congested ports and preventing merchandise from reaching store shelves. Further, the inability to return empty containers is causing backups and interfering with chassis availability. Finally, given that Hanjin is part of a larger shipping alliance, uncertainty about its future is effecting the ability to move cargo unassociated with Hanjin. We understand that U.S. exporters are experiencing similar disruptions, as outbound cargo is turned away for the same reasons.”

Evergreen Line, Hanjin’s partner in the CKYHE Alliance, announced yesterday it was taking steps to purge Hanjin cargo from its system.