Giant Shipping Line Collapses: Vietnamese Exporters Lose Sleep

The bankruptcy of Hanjin Shipping is considered the largest ever in the world shipping industry.

The collapse of Hanjin Shipping, a giant Korean shipping corporation, has greatly affected the sea freight export activities of Vietnamese enterprises.

The sectors most affected by the bankruptcy of Hanjin shipping company are textiles, footwear, seafood, and wooden products...

Fear of lost goods, increased freight

On September 5, speaking with Ho Chi Minh City Law, Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said: Up to now, the association has received initial information from five member companies, most of which export pangasius to the US, affected by the Hanjin shipping line filing for bankruptcy.

“Dozens of seafood export containers on the Hanjin ship are drifting at sea, making businesses restless because they do not know what will happen to their shipments,” said Mr. Hoe.

Hanjin Shipping Company ships transporting goods. Photo: Hanjin Shipping Company

A representative of a seafood company said that they are “sitting on fire” because of the goods they are transporting by chartered ships of Hanjin. Because many ports in the world such as China, Spain, etc. have refused to accept Hanjin ships to dock. In addition, the company’s fleet is stuck at sea and in ports in many countries, some of which have been seized by other countries to pay off debts.

“We are continuing to look for information about the shipping vessel to know the schedule and contact the transit port to allow timely withdrawal of goods. If the goods stay on the ship for a long time, the delivery schedule with the importer will be delayed. Not to mention the decrease in the quality of the goods, leading to the importer canceling the transaction, we will suffer great losses. But the most worrying thing is losing the goods and the ship's sailors holding the ship and keeping the goods at sea for many days to claim benefits from the shipping line owner" - the representative of this company worried.

Other export industries that hire Hanjin shipping lines for transportation are also nervous. Mr. Tran Quoc Manh, Chairman of the Board of Directors of Saigon Production and Trade Development Joint Stock Company (Sadaco) and Vice Chairman of the Handicraft and Wood Processing Association of Ho Chi Minh City, said that the company is "stuck" with a number of wooden furniture export shipments that Hanjin is hiring to transport this time. Currently, the company is trying to remove the goods from the Korean shipping line's container and transfer them to another carrier's container in order to deliver the goods to customers on time.

“Because this export batch is not much, the damage is not big. However, for companies that export a lot, the impact will definitely be big. The cost of withdrawing goods alone accounts for 1%-2% of the value of each container of goods,” Mr. Manh shared.

In fact, global container shipping rates have increased in recent days. A company said that sea freight rates from Vietnam to other countries and vice versa will also increase sharply in the short term due to the lack of ships. This will cost Vietnamese exporters more money.

Need support from government agencies

The representative office of Hanjin Shipping Company in Vietnam has just announced that it will stop accepting new cargo bookings from August 31, 2016.

Regarding the above information, Mr. Le Duy Hiep, Chairman of the Vietnam Logistics Association (VLA), said that on September 5, the association coordinated with the Ministry of Industry and Trade, the Embassy and the Trade Office of Vietnam in Korea to notify members to grasp information about the bankruptcy of Hanjin shipping company and have appropriate plans.

Mr. Hiep said: “Hanjin is the seventh largest shipping company in the world, accounting for 5% of the international shipping market share and about 10% in the Vietnamese market. This shipping company specializes in transporting goods to the US, Europe... Therefore, export industries to this market such as footwear, textiles, seafood, wooden products... will be affected during this period. Later, other shipping companies can meet the market share that Hanjin leaves behind.”

Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department - Ministry of Industry and Trade, commented that the above incident has affected most of Vietnam's export sectors, especially companies that are hiring Hanjin shipping line for transportation. Currently, the Ministry has coordinated with relevant agencies to support export enterprises. For example, supporting enterprises to withdraw goods, convert containers or receive goods, and requesting port authorities to prioritize handling arrangements to avoid congestion.

The Ministry of Industry and Trade also recommends that businesses that have put goods into Hanjin containers need to quickly take the goods out and contact foreign partners to have a plan to choose and change shipping lines. As for shipments that have arrived at the port, they need to urgently complete procedures and customs clearance, and release the goods from Hanjin containers.

“For shipments that are being transported, it is necessary to continue working with Hanjin's representative office in Vietnam to monitor the schedule and coordinate with import partners to have a plan to receive goods at the port,” Mr. Hai recommended.

According to PLO