Important Notice: What to Expect as Hanjin Shipping Co. files for Court Receivership?

Date: September 2, 2016
Subject: Important Notice: What to Expect as Hanjin Shipping Co. files for Court Receivership?
Hanjin Shipping Co., a member of the CKYHE Alliance, consisting of Cosco Container Lines, K Line, Yang Ming Line, and Evergreen Line have filed for Court Receivership August 31, 2016. While Hanjin is not a primary carrier for Delmar, the impact of this development is affecting cargo shipped through all Alliance members as most vessels are shared between its members.

Cargo which was contracted with Hanjin, on vessels that have berthed at Canadian ports have now been discharged at the respective Vancouver and Prince Rupert terminals including the Hanjin Vienna V0091W. For Hanjin containers loaded on other member vessels such as the Yang Ming Masculinity and the K-Line Greenwhich, local cargo has been processed and made available for pick up subject to guaranteed terminal related charges, while cargo destined to inland destinations such as Toronto and Montreal remains on hold as railways seek payment assurances.

Newer arrivals such as the Hanjin Scarlet are being managed by the terminals on a case by case basis. Currently, the Hanjin Scarlet V0029E is still at anchor at the port of Prince Rupert awaiting berthing confirmation.

In view of the ship carrying cargo for other member carriers which are important customers for West coast terminals and railways, we expect the vessel to be offloaded in a reasonable period of time, as all stakeholders, such as terminals and railways develop processes and policies relating to their commercial responsibilities, liabilities and of course payment guarantees.

Based on the current information available relating to Hanjin’s financial situation, Delmar envisions we may see a declaration of Force Majeure and importers will likely incur additional charges such as (but not limited to), port, terminal and rail costs, which may not be able to be satisfied by Hanjin.

These charges if assessed by the entities involved, will be for the account of Shippers / Consignees listed on our Deltrans bills of lading and we will require payment guarantees from all customers.

Delmar has now finalized interim arrangements with the CN railway to obtain possession of the limited cargo affected in our network and will arrange to move such cargo to final destination as soon as Hanjin and the terminals come to a final procedure on steamship release.

Delmar strongly recommends that all our customers review upcoming orders and book as early as possible. While the removal of Hanjin from the CKYHE alliance will lead to future blank sailings, i.e., weeks with no Alliance vessels departing, we also understand that Hyundai may deploy additional vessels to ease the capacity shortage.

Moreover upcoming holidays in China will also increase pressure on already strained capacity. Some Carriers have also announced blank sailings after Golden Week, which will further accentuate space related challenges. While Delmar has numerous other carrier agreements, there is no doubt that a severe space shortage is imminent. Importers should consider All-Water Services and Halifax routings as they plan upcoming imports.

Bookings tendered to Delmar that have not departed are being rerouted by all Delmar origin offices to ensure that these bookings will not be affected by the Hanjin situation. Any re-booking surcharges will be the responsibility of the exporter for cargo purchased on FOB Incoterms. Should any exporter refuse to accept the re-booking fees, your local Delmar representative will bring these issues to your attention for resolution.

At this point, ERS (expedited rail services) is still being offered by the terminals, so importers should review their incoming DCMS status reports and contact the local Delmar office if this service is required.

Delmar will continue to monitor this extraordinary situation and will do our utmost to keep our customers informed of changes as they occur.

We anticipate being able to retrieve all Canadian cargo and all Delmar customers will be presented with viable delivery solutions. In most cases however, there will unfortunately be additional costs involved.

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