Hanjin Shipping Co. Collapse Leaves $14 billion Worth of Goods Adrift

Hanjin’s Ghost Ships Seek Haven
Suppliers to companies such as Nike Inc. and Hugo Boss AG are scrambling to ensure their T-shirts and sneakers reach buyers in time for the year-end holiday season after the collapse of Hanjin Shipping Co. left an estimated $14 billion worth of goods adrift.
Esquel Group, a Hong Kong-based manufacturer for fashion brands including Nike, Hugo Boss and Ralph Lauren, is hiring truckers to move four stranded containers of raw materials to its factories near Ho Chi Minh City as soon as they can be retrieved from ports in China. Liaoning Shidai Wanheng Co., a Chinese fabrics importer and a supplier to Marks & Spencer Group Plc, has made alternative arrangements for shipments that were scheduled with Hanjin.
‘Our production lines are waiting,’ said Kent Teh, who runs Esquel’s Vietnam business. ‘We potentially have to take airfreight to deliver the garment items to clients in the U. S. and U. K.’
Apparel, handbags, televisions and microwave ovens are among goods stranded at sea after Korea’s largest shipping company filed for bankruptcy protection last week, setting off a series of events that roiled the global supply chain. A U. S. Court on Tuesday provided a temporary reprieve, which may help vessels call on ports such as Los Angeles without the fear of getting impounded. Any major bottlenecks ahead of Thanksgiving and Christmas could put a dent in the two-month shopping season, which netted some $626 billion of sales last year in the U. S.

This post was published at David Stockmans Contra Corner By Nguyen Dieu Tu Uyen, Kyunghee Park and Mai Ngoc Chau, Bloomberg Business ‘ September 8, 2016.