Logical Logistics

The Federal Maritime Commission (FMC) is aware that Hanjin Shipping has advised its customers that the company’s application to engage in a voluntary restructuring process was denied by its creditors. The Commission is also aware that Hanjin Shipping has disclosed it has filed for court receivership and that these two actions combined have caused uncertainty among the American shipping community about cargo in transit with Hanjin Shipping.

For U.S.-based shippers and cargo owners trying to determine what options they have, the Commission shares this initial guidance:

This is a non-United States legal matter at the moment. Hanjin Shipping is a company located in the Republic of Korea and has applied for receivership in that country.

This is a legal matter and as such, it is important that affected parties, including shippers, consult with their attorneys on what remedies are available to them.

The Commission will be vigilant in watching for, and quick to act on, any improper behavior by other carriers and regulated parties (such as marine terminal operators, non-vessel-operating-common-carriers, and freight forwarders) that would constitute violations of the Shipping Act.

The Federal Maritime Commission has no jurisdiction when it comes to resolving bankruptcy claims and does not intercede in legal actions between third parties that will be heard by the courts.

The Commission is concerned about the operational and competitive impacts of Hanjin Shipping's status on the shipping industry broadly. Our staff will be closely monitoring for the foreseeable future for any developments that might impact shipping markets.

The Commission will issue further updates and guidance as circumstances and developments warrant.

Meanwhile, the FMC has established a protocol for communicating requests for assistance to the agency concerning developments related to the status of Hanjin Shipping.

Allegations of Shipping Act violations or requests for assistance related to retrieving or receiving cargo in transit should be communicated in writing via Email: [email protected]

News that the 20,000-member International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) plan to meet again in early November should be welcomed by West Coast shippers who can recall cargo slowdowns that occurred over a nine-month period before being settled in the contract agreement of February 2015.

As reported here last August both parties announced in San Francisco that they would try to get an early start on contract extension talks well before the current agreement expires on July 1, 2019.

While no other details were forthcoming, the timing of the meeting could not be better. All of the major West Coast ports have been reporting robust container throughput this year, despite the fact that the Panama Canal was finally expanded this past summer.