Reps. Hahn, Napolitano want hearing scheduled on Hanjin collapse
U.S. Rep. Janice Hahn, D-Calif., said ports and customers need to be better prepared for instances of container lines going out of business.
U.S. Rep. Janice Hahn, D-Calif., said Thursday that she and Rep. Grace Napolitano, D-Calif., plan to ask the House Transportation and Infrastructure Committee Chairman Bill Shuster to hold a hearing on the Hanjin Shipping bankruptcy, which is roiling the shipping industry and ports around the world.
Hanjin, the seventh largest container carrier in the world, filed for court receivership last month so it can reorganize in a bid to remain competitive during a period of massive overcapacity and plunging freight rates in the ocean freight sector. The move followed a decision by the Korean Development Bank to no longer support Hanjin with additional debt. The Korean government has indicated that it is trying to orchestrate a liquidation of Hanjin, with fellow Korean liner carrier Hyundai Merchant Marine acquiring many of its assets.
The uncertainty about whether Hanjin vessels or containers will be seized by creditors has jeopardized cargo that many retailers were expecting to receive for the upcoming Halloween and holiday shopping seasons. It has also resulted in the removal of about 8 percent of the capacity on the Asia-North America trade lane during the traditional peak shipping season. Hanjin vessels have been delayed from berthing or having cargo discharged because of concerns from marine terminals and other service providers about how they will get paid. Many Hanjin ships, for example, have not docked as normal at Pier T in Long Beach, which is operated by Hanjin's joint venture Total Terminals International.
Hahn, whose district includes the Port of Los Angeles, wants to understand what went wrong in the Hanjin situation so the government and industry have mechanisms in place to handle the fallout from any future shipping failures, her press secretary, Elizabeth Odendahl, said.
Earlier this month, Hahn and Napolitano took part in a press conference outside Pier T to draw attention to the loss of work for longshoremen and truckers because of the cessation of Hanjin shipping calls, concerns over whether these workers would get paid for previous work of moving containers, and reports that marine terminals are charging extra fees to shippers to release their Hanjin cargo that is already on the dock.
Experts say there is increasing likelihood that the number of international container lines could shrink further in the near future due to insolvency or mergers.
When a potential hearing on the Hanjin matter would be held is unclear. Congress is set to adjourn next week so lawmakers can campaign for the November election and Hahn has decided not to seek re-election. A hearing could be scheduled during the lame duck session between the election and the holiday recess.
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