Members of California’s congressional delegation asked the federal government to get involved in the Hanjin insolvency, and Rep. Loretta Sanchez said Hanjin’s stranded ships may have goods needed to keep U.S. assembly lines running.
Members of California’s congressional delegation asked the federal government Sunday afternoon to get involved in the Hanjin Shipping insolvency, and get cargo stranded on the Korean company’s ships offloaded at U.S. ports and sent to their destinations.
U.S. Representatives Janice Hahn (CA-44), Alan Lowenthal (CA-47), Grace Flores Napolitano (CA-32) and Loretta Sanchez (CA-46), as well as Federal Maritime Commission (FMC) Chairman Mario Cordero and labor leaders, all took part in a press conference outside of Pier T in Long Beach, which is operated by Total Terminals International, a company partly owned by Hanjin.
According to Mark Jurisic of Local 13 of the International Longshore and Warehouse Union, the idled terminal would normally have had 200-300 longshoremen working during its two shifts. Today, he thought the only longshoremen at the facility were members of a skeleton crew to maintain refrigerated equipment to prevent food or other temperature-sensitive goods from being damaged.
Barb Maynard of the Teamsters Port Division said the shutdown is costing work for drayage drivers, most of whom are independent owner operators who must continue to pay for the use of trucks despite the unavailability of cargo.
“Hanjin’s collapse presents an unprecedented global crisis,” Hahn said. “We’ve never seen a shipping company this large file for bankruptcy and there is no road map for what should happen next. The global shipping industry will have to deal with new issues over the coming months and years as these bankruptcy procedures will take some time.”
Hahn expressed concern about workers on the ships, but also said, “there are valid concerns for not wanting to unload these ships. There is great uncertainty over whether our ports and workers will ever get paid. However, leaving these ships stranded with thousands of containers is not the answer. Every day these ships remain outside our ports is another day that our local port workers and truck drivers go without work, and businesses waiting on goods are losing money.”
She and other members of the delegation called on U.S. Secretary of Commerce Penny Pritzker to intervene, noting that the shipping industry is entering the peak season when many holiday goods headed to retailers are arriving.
Hahn said Pritzker should “step in and start discussions with Hanjin and South Korea to come to an agreement that guarantees our ports and our workers will be paid, brings the Hanjin crews to safety and gets the ships unloaded.”
In addition, Hahn said she hoped the FMC would not allow businesses to be “gouged” by marine terminals because of Hanjin’s problems.
“This is a case study in what happens when we are a global economy,” said Sanchez, who used the press conference to underline her opposition to the proposed Trans-Pacific Partnership (TPP) . “If we are making trade deals, for example, that take away the American worker’s ability or the federal government’s ability to interact when something like this happens, then we are giving away our power to intercede on behalf of the worker. And that is why each trade agreement should be looked at and that is one of the reasons why looking at TPP, I have been opposed to it.”
In addition to holiday merchandise, Sanchez expressed concern that the stranded Hanjin ships might have parts and components needed to keep assembly lines in the U.S. operating.
“This is what happens when you are an interconnected economy and you give away your control,” Sanchez said. She also expressed concern about “price gouging,” an apparent reference to the sharp increase in transpacific container freight rates in the past week.
In addition, Sanchez called for Pritzker to “get on the plane, get out here, and let’s figure out how we fix this situation.”
Cordero noted Hanjin is the seventh largest container carrier and transported about eight percent of transpacific container cargo and that Hanjin’s problems “potentially could be a major crisis if things are not handled correctly.”
He praised the members of Congress for their efforts to try and mitigate fallout from the Hanjin insolvency.
“Business and labor are in lockstep on the issue of moving the cargo – that’s the most important that we need to do, to make sure the cargo is moving,” Cordero said. In addition, Cordero said he has spoken to a number of businesses to stress the importance of not taking advantage of the situation by imposing unreasonable practices or charging unreasonable fees.
He noted Hanjin initiated a Chapter 15 proceeding late Friday afternoon in U.S. District Bankruptcy Court in Newark, N.J. in an attempt to extend to the U.S. protections it enjoys in Korea on account of having entered into a rehabilitation proceeding in a Seoul court last week.
The Chapter 15 filing “does not give an automatic stay,” said Cordero, but a hearing is planned for Tuesday afternoon in Newark, which he said could “alleviate the creditor issue and potential seizure against Hanjin.”
Cordero said the FMC is seeking to mitigate the effect of the Hanjin insolvency.
He told American Shipper in a telephone interview Sunday afternoon that he plans to meet with representatives of beneficial cargo owners, including retailers, on Tuesday and asked “the alliance to all cooperate and mitigate the worst scenarios.”
California delegation wants federal action on Hanjin insolvency
