Meanwhile, The Federal Maritime Commission told American Shipper Tuesday that despite Hanjin no longer accepting bookings in the U.S., the commission hasn’t received any amendments to the CKYHE Alliance agreement since it was originally filed in 2014.
It may be cold comfort to shippers and other businesses whose operations have been disrupted by the collapse of Hanjin Shipping, but press reports say that Cho Yang-ho, the chairman of Hanjin Group, apologized for the chaos caused by Hanjin filing for receivership.
The Yonhap News Agency quoted Cho as saying, “I feel fully responsible for Hanjin Shipping’s receivership and cargo chaos, but I want to say that we have done everything we can do to save the shipper.”
Cho is also chairman and chief executive officer of Korean Air Lines as well as the Hanjin Group.
Yonhap said Cho called for the country’s largest container shipping company to be salvaged, regardless of ownership.
Speaking at a parliamentary hearing, Cho compared the competition among large shipping companies to a game of “chicken,” Reuters reported.
Meanwhile, on Monday, the U.S. Bankruptcy Court in Newark overseeing Hanjin’s Chapter 15 proceeding issued an order saying the order and protocol it issued Sept. 9 will apply to all non-vessel-operating common carriers and that “Hanjin shall not assess detention charges for failure to return any containers or chassis.”
Many businesses have had trouble returning Hanjin containers and an update from Hanjin shows 43 container yards for return of Hanjin-owned containers were closed, including every one of the six locations in Southern California and three of the four in New York. Thirty-four locations were listed as open, but many of these were at interior points.
A list of the status of Hanjin ships on the same website shows two under arrest in Panama, the Hanjin Baltimore and Hanjin Bremerhaven, and a ship called the Seaspan Efficiency waiting to berth in Wilmington, N.C.. The Hanjin Scarlett remains under arrest in Prince Rupert, Canada and the Hanjin Vienna is under arrest near Vancouver, Canada. The company has other ships listed due to arrive in the U.S. later the month.
Also on Monday, the 3rd Circuit Court of Appeals dismissed an appeal by fuel suppliers and towboat companies with maritime liens against five ships chartered by Hanjin.
The maritime lien creditors that filed the appeal were Glencore, a fuel supplier and parent company of OceanConnect Marine; McAllister Towing and Transportation; and Moran Towing.
According to a filing last month, Glencore/OceanConnect had liens totaling about $1.6 million, while the liens of McAllister amounted to $11,900 and the liens of Moran stood at $12,351.
While one of the ships, the Hanjin Montevideo, was arrested before Hanjin sought bankruptcy protection in the U.S., after Hanjin filed for protection from creditors, a U.S. Bankruptcy Court in New Jersey forbid the companies from arresting or intervening in the arrest of Hanjin chartered ships in or due to arrive in the U.S.
The fuel supplier and tug companies asked the bankruptcy court for relief from the stay, forbidding arrest and were rejected twice. After that, they made a motion for emergency relief with the U.S. District Court in New Jersey. When that was also rejected, the companies filed an appeal with the 3rd Circuit.
However, the 3rd Circuit dismissed the appeal on Monday for lack of jurisdiction. The court said, “The orders were not appealable as injunctions. Moreover, even assuming the motion filed in District Court is deemed a request for injunctive relief, the request was for a temporary restraining order. Denials of requests for a TRO are not immediately appealable.”
J. Stephen Simms, the attorney who filed the appeal, said last week there are similar orders forbidding arrests in other countries, including Singapore and Australia.
“The interesting thing is that the orders have been entered without any evidence of what Korean law allows,” Simms said. “In Korea, chartered vessels are not considered part of the bankrupt’s protectable interests, so one can arrest ships that are chartered to Hanjin in Korea.”
In his brief, Simms said the vessels involved “are owned by apparently solvent owners and have joint and several obligations in rem to pay the maritime lien creditors. If the maritime liens in rem (against the vessel) are not executed upon in the United States, the vessels will depart and likely be arrested where the maritime lien creditors have no in rem, priority right as they do in the U.S.”
Simms said Chapter 15 of the U.S. Bankruptcy code, which has extended protection to Hanjin in the U.S., “was never intended to allow a debtor more protection than they would get foreign main proceeding.”
He said, “It seems odd that it is still possible to arrest ships in Korea.”
Hanjin is a member of the CKYHE Alliance with COSCO, “K” Line, Yang Ming and Evergreen Line. The Federal Maritime Commission (FMC) told American Shipper Tuesday that even though Hanjin is no longer accepting bookings in the U.S., the commission has not received any amendments to the CKYHE Alliance Agreement since it was originally filed in 2014.
An FMC spokesman said, “We would expect that, at some point in the near future, all agreements to which Hanjin is a party will be amended to remove Hanjin, or, in those situations where the agreement is only between Hanjin and one additional party, the agreement would be terminated. Commission regulations do not, however, have a specified timeframe in which that would need to occur.”
He noted in Hanjin’s case, “The remaining CKYHE carriers may still have cargo on Hanjin vessels, which may delay Hanjin’s removal from the agreement and/or the other carriers may be in possession of Hanjin assets (e.g., containers) that the bankruptcy trustee may want handled in a certain way, which could delay amendment of the agreement.”
An executive with one of the other CKYHE carriers contacted by American Shipper confirmed that his company still had thousands on containers on Hanjin ships.
Hanjin Group chairman apologizes for ‘cargo chaos’
