For those not caught by this ‘event’, Hanjin Shipping is probably the no 3 carrier of container traffic in our part of the world. They have 140 plus ships and according to their last report carry over 100 million tons per annum.
Containers are now stranded all over the world and the knock-on effects will be felt for many months across all sectors of the Australian economy.
This will affect current exports of goods and imports of goods to be used in the manufacture of exports, both of which are currently caught in containers on Hanjin vessels around the world. It will also increases the basic costs of trade.
Removing one major carrier reduces competition on shipping rates and increases the costs to insurers which will lead to increased premiums for all.
South Korea is also a major trading partner for Australia and Hanjin carries (or used to carry) much of that trade. South Korea is also Australia's fourth-largest overall trading partner. Two-way goods and services trade was worth around $35 billion in 2014-15, representing 5.3 per cent of all of Australia's international trade.
This crisis is a big deal for Australia. Read more >
Below please note excerpts taken from comments made by Mr. Andrew Hudson – Partner, Gadens Lawyers and Director of the Export Council of Australia (ECA)/ Chair of the Trade Policy Committee for the ECA. Please note that since the comments of Andrew on 6 September the situation has worsened:
· One Hanjin vessel has been arrested in Sydney and only partially unloaded and has been moved to Glebe with other containers still loaded.
· Another Hanjin vessel is “doing circles” in Port Philip Bay in Melbourne as the Korean Government refuses permission for it to berth around fears of the vessel also being arrested.
· Empty Container Parks are filling up in Australia with Hanjin containers and with nowhere to go.
· Even in the US where its laws protects against arrest while Hanjin is subject to a “Court of Commercial rehabilitation”, the International Longshoreman Association is refusing to unload containers because of money owing.
· Further, the security deposits are now higher for larger containers ($4,000 for a 40’ container).
· Even the terminal operators are charging an additional “administration fee” and a security deposit where the containers are “clear” and the importer holds a Delivery Order.
We would encourage exporters to follow the news carefully and be in touch with their freight forwarders, customers, financiers and insurers on a regular basis.
Please note: Insurance may not cover the claim but the failure to notify of a potential claim can void insurance which may be available.
All in all you need to be alert to developments and opportunities which arise, only act properly on advice and with records – and do nothing that could void your insurances.
Finally – as always – if pain persists, see your lawyer.
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