- Plans to add four vessels to the U.S., nine to Europe
- Collapse of Hanjin Shipping causing supply disruptions
Hyundai Merchant Marine Co., South Korea’s second-largest container line, plans to deploy 13 more vessels to the U.S. and Europe to help ease cargo disruptions after its bigger rival Hanjin Shipping Co. filed for court protection, a person familiar with the situation said.
Hyundai Merchant plans to add four vessels to the U.S. starting Sept. 9 and nine on Europe routes later this month, the person said, asking not to be identified before a public announcement expected later Thursday.
Hanjin Shipping’s collapse is causing supply disruptions as the company’s vessels get stranded around the world, while companies such as LG Electronics Inc. seek other carriers to move their cargo. The world’s seventh-biggest container shipping firm, with a market share of 2.9 percent, filed for court receivership Wednesday just before the year’s biggest shopping season kicks off.
Hyundai Merchant is itself in the midst of a creditor-led debt restructuring program. Unlike Hanjin Shipping, it managed to obtain financial help after meeting all requirements for funds. State-run Korea Development Bank is now the biggest shareholder of Hyundai Merchant with a stake of about 14 percent after swapping debt for equity.
Stuck at Sea
Three of Hanjin’s vessels were stuck off the Los Angeles-Long Beach port complex, while one was stranded near the Port of Prince Rupert in British Columbia, Canada. Workers in the Korean port of Busan refused to work on a ship because the company hasn’t paid dues, forcing the cancellation of a berthing. Another was seized in Singapore late Monday.
The possibility of Hanjin Shipping’s liquidation can’t be ruled out, though a court will determine its fate, said Yim Jong Yong, chairman of South Korea’s Financial Services Commission, in comments e-mailed by the regulator.
The regulator said Wednesday that Hyundai Merchant may consider taking over some of Hanjin Shipping’s assets, including vessels, network and staff. Hyundai Merchant said then it will work with authorities to come up with measures, without elaborating.