September 9, 2016
Hanjin Shipping and Receivership Update #6
To Our Valued Customers:
Regarding the situation with Hanjin Shipping, we are sharing in our sixth update what we are experiencing specifically with US Exports to Asia and world:
Case Study: The example of what is happening to Hanjin’s “PSG” service is indicative of the challenges the export market is having. The “PSG” service is a great service, originating in Los Angeles and Oakland, and then servicing Busan, Shanghai, Ningbo, Yantian, Singapore, Jebel Ali, Bahrain, and Dammam. It’s a true all water west coast service to the Middle East. The partners on that service are OOCL, NYK, Hanjin and PIL – with Hanjin offering 4 of the 12 ships in the weekly rotation. Now that those four ships are effectively out of service (and stuck somewhere), the service is in jeopardy of being temporarily canceled. And with Hanjin vessels already enroute to final destination, what happens with the containers that are discharged at terminals prior to reaching the final destination because of vessel seizures. Additionally, bookings for this service have been rolled weeks by all carriers, and in addition, member carriers haven’t created a plan yet to make up for those lost 4 vessels.
The challenges with this service epitomizes what exporters are dealing with and will continue to deal with possibly through the end of the year: service rotation changes and unscheduled “skips” in the weekly services, equipment shortages, loss of perishable shipments due to delays, uncertainty on when vessels will berth, changes in cut-offs, etc. It’s simply not going to get better for exporters in the near future.
Equipment Shortages: Equipment supplies are shrinking, especially in the Midwest where equipment is always a struggle. Not simply because of Hanjin’s own network loss, but all the partner carriers with equipment stuck on Hanjin vessels that are in effect out of service, and the rush to book on other carrier services.
Will the extra loaders help? Yes, of course. But not for some time. Most of the extra loaders are originating in Asia and sailing in weeks 37-40, which means arrival times in the United States for export cargo won’t be until mid-October. In addition, many of the carriers who are offering extra loaders are restricting destinations to west coast and east coast base ports and not accepting IPI cargo – which of course is where exporters need equipment the most.
What are we writing about next week? Two key topics: Impact on US Customs entries for Hanjin rerouted containers, and now that vessels are slowly allowed to berth, what’s next in handling those abandoned containers in need of releases, transloading, deliveries or other services.
What about GRIs? They’re coming. Carriers have announced GRIs in most export trade lanes for both October 1, 2016 and November 1, 2016 – some as high as $450/40’ container. We expect much of the October increase to go into effect and for the November increase to be evaluated once we get closer to the middle of October.
Our priority as we navigate this unprecedented situation, is to keep your cargo flowing as quickly and as seamlessly as possible, given the current conditions – and to communicate effectively along the way. We will get through this together.
Thanks for all your support.
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