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Hanjin Shipping bankruptcy causes minor hiccups

September 12/19, 2016; Volume 31, Number 7

By Ken Ryan

screen-shot-2016-09-16-at-1-18-50-pmHanjin Shipping Co., the world’s seventh-largest container shipper, recently filed for receivership in Seoul, South Korea. As a result, an estimated $14 billion in cargo has been tied up globally as ports, tugboat operators and cargo-handling firms that are worried about not being paid refuse to work for Hanjin, according to reports. While some ships have been offloaded, bottlenecks are forming at some ports and truck yards as containers pile up. As of Sept. 15, some 60 Hanjin cargo vessels are stranded at sea.

While some flooring companies that rely on imports have largely been unaffected by Hanjin’s bankruptcy, others have been hard hit. One of those is Jeff Hamar, president of Galleher, a top 10 distributor based in Santa Fe Springs, Calif., who said his company has been significantly impacted. “We had five containers that were impacted. I believe they are on four different ships. One ship with two containers was offloaded over the weekend in the Long Beach port and we should get the containers any day now. Another ship was scheduled to dock on [Sept. 14] and we should have the container on that ship soon. No news on the other two ships and the last two containers.”

At the time Hanjin declared bankruptcy, Metroflor Corp. had some containers on their vessels, according to Russ Rogg, CEO. “We’re seeing some modest delays in securing those containers upon arrival.” However, he said Metroflor is “working through the situation with minimal disruption to the company and our customers.”

Most other distributors and manufacturers contacted by FCNews have not been impacted or have worked around the situation. John Carney, executive director of Bravo Services LLC, the umbrella organization for 14 of the industry’s leading distributors, said no one in the Bravo group has been impacted so far.

screen-shot-2016-09-16-at-1-19-51-pmJonathan Train, president and CEO of Swiff-Train, a top 20 distributor based in Houston, also said the company has been unaffected. “We do not use Hanjin, and any of our steamship lines that may have scheduled our containers through Hanjin were diverted.”

Floor covering manufacturers and importers are no stranger to problems on the seas and at the ports. In February 2015, MaxWoods faced a dire situation during the West Coast port slowdown. At the time, MaxWoods sourced most of its hardwood flooring products, leading CEO Peter Spirer to say, “The port issue is one of real seriousness and threatens to grow to massive proportions. Importers like ourselves will be in a bad way depending on its duration.”

In the last 18 months, MaxWoods has been making the transition from selling Chinese imports to domestic product, with American OEM as its new domestic supplier. And so the fate of Hanjin is not exactly keeping Spirer up at night. “Thankfully, we aren’t involved in any way with the Hanjin Shipping bankruptcy,” he said. “Matter of fact, I’m not even sure who Hanjin is.”