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Vietnamese cargo on bankrupt Hanjin ships stranded at sea

Vietnamese cargo on bankrupt Hanjin ships stranded at sea

Wednesday, September 21, 2016, 14:34 GMT+7

Vietnamese goods remain stranded at sea after cargo ships owned by the South Korean shipping line Hanjin refused to dock for fear of being held hostage to debt payment demands.

South Korea-based Hanjin Shipping Co Ltd, world's seventh-largest container line with a total of 141 vessels as of early September, filed for receivership last month, leaving more than 100 ships and their cargo at sea, according to Reuters.

In wake of the company’s bankruptcy, thousands of containers worth of goods, including that of Vietnamese businesses are stranded at sea after the South Korean company gave orders to its ships not to attempt to dock for fear of being seized over unpaid debts.

The Ho Chi Minh City-bound Hanjin Chennai cargo ship, which was scheduled for arrival on September 2, is still floating at sea with 833 freight containers of imported goods on deck.

According to the Vietnam Marine Administration (VMA), many Hanjin ships remain anchored near seaports in 23 countries after they were denied access by the ports because of doubts over about their ability to pay service fees.

Containers in limbo

Director of a plastics company based in Ho Chi Minh City told Tuoi Tre (Youth) newspaper his company’s VND4.7 billion (US$209,821) shipment of plastic granules has not been heard of since Hanjin’s bankruptcy.

“We are still waiting for loss reports from the seller, but our business has been turned upside down. Now we have to look for another source to import our raw materials,” the director said.

P., director at a computer components importer based in Hai Phong Province, said he couldn’t track the location of his September 2 shipment, since the company’s website has been down since it filed for bankruptcy.

According to P., the incident has caused him to lose a number of signed contracts with his clients, as they have decided to seek other providers.

Hanjin’s bankruptcy has taken a heavy toll on Vietnamese business given that it happened at the height of import activities in preparation for the year-end holiday season, according to MP Logistics Director Dang Minh Phuong.

Meanwhile, companies are unsure how to handle customs declarations for goods that are still held up on the South Korean firm’s ships.

“According to regulations, a customs declaration expires after fifteen days. What to do next is anyone’s guess,” head of the customs procedures department at a transport agency in Ho Chi Minh City said.

Hanjin currently handles around five percent of Vietnam’s flow of goods, mostly in the country’s key export fields such as garments, footwear, woodwork, and seafood, according to VMA estimations.

According to reports by Hanjin Vietnam, as of September 6 over 3,000 Vietnamese freight containers were still in limbo.

Among these, 1,516 Vietnam-bound containers are being held up at the ports of origin countries, 432 are stuck in sellers’ warehouses, and 1,323 exporting containers are stranded at terminals or on Hanjin ships.

A report by Saigon New Port in Ho Chi Minh City showed Hanjin’s debt amounted to approximately VND50 billion ($2.23 million), while Vietnam International Containers Terminal (VICT) said the South Korean shipping line was still owing them $80,000.

The two ports have mandated use of their service or a deposit from clients who want to unload their cargo from Hanjin ships.

Hanjin’s debts have accumulated from unpaid warehousing, loading and unloading fees as well as maintenance costs for containers, according to a report submitted to the Hai Phong city's Marine Administration by Hanjin’s clients.

Authorities in search of a solution

VMA has given orders to local marine administrators to facilitate proper procedures and facilities for the unloading of cargo from Hanjin ships.

The marine watchdog has also encouraged businesses to find ways to unload their shipments from Hanjin ships, since goods carried by a shipping company are often not the subject of seizure.

Tran Thanh Hai, Deputy Director of the Export – Import Authority under the Vietnam Ministry of Industry and Trade, said in an interview with Tuoi Tre that it was “concerning” for the containers still floating at sea given Hanjin had refused to dock its ships.

“We are still actively seeking solutions, but there are no new updates at the moment,” Hai said.

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