Hanjin, the South Korean shipping company that filed for bankruptcy in Seoul on August 31, has paralyzed business for millions of people around the world. Many in the global village are ranting with as much as $14 billion (US) worth of cargo stranded at sea.
In Canada the port of Prince Rupert in British Columbia is where two Hanjin ships were marooned this past week.
Jamie Kerr, of Montreal, is the owner of Fabco Custom. He oversees the production of elements for clients in North America. He has five containers on three Hanjin vessels; two containers are sitting in port, and three are on ships crossing the ocean now.
ListenKerr said he began the day on August 31st, with a 4 am conference call with clients and company owners to avoid cancelled orders.
“The whole thing is a complete disaster”
“I’ve been shipping on this lane (Shanghai to Prince Rupert) for 15 years and we’ve been using Hanjin vessels for a very long time, it’s a very efficient, cost effective way to go across the Pacific.”
According to reports on September 7th, Prince Rupert is one of the few ports where Hanjin has managed to convince the authorities to begin processing their containers.
“We were very fortunate. We only got caught with five containers on the water and those containers will be released eventually,” Kerr said, grateful that his products are not perishable. For those with perishable goods, he says, “the whole thing is a complete disaster.”
Kerr says several of his clients have been patient. “They are understanding to a point, but if this goes on for even another week they will no longer be understanding.” And he will have penalties to pay on late orders.
An estimated 540,000 containers are stuck on Hanjin ships at sea
Meanwhile, his costs have soared. “Our prices for our shipping have risen dramatically because of the this incident even though there are more boats and more containers than there are people shipping, which usually means, due to supply and demand your price will go down, this incident has given them an excuse to raise their prices by quite a bit.”
And he is mystified that the seventh largest shipping company in the world could go under. “The thing that surprises me is that these people are shipping 5,000 containers a week… that’s a lot of cash! And the bankruptcy is caused because they couldn’t restructure a five billion dollar loan. That’s the information we’ve been told.”
As for the toll the tragedy is taking on people in business globally, Kerr says, “It doesn’t matter how upset you are it still won’t change what’s happening, so there’s no point in getting upset you just have to grin and bear it… that’s the nature of business.”
It doesn’t matter how much you raise your voice or it doesn’t matter how upset you get you’re still not going to get your container off the ship. It’s just not going to happen. It’ll happen when it happens and it’ll happen in the way that everybody’s protected over there.”
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