Hanjin’s messy bankruptcy in the midst of this year’s shipping industry’s peak season has plunged their stake owned terminals in both Long Beach, California, and Seattle, Washington towards the red as both ports have been suffering declines in overall container traffic now that Hanjin’s ships are no longer feeding a steady volume of business to each terminal. After Hanjin Shipping missed their Friday, December 23rd, 2016 US court deadline to reveal the assets & liabilities they still currently have – with an attempt of seeking an extension to January 9th, 2017; presiding Judge John K. Sherwood has curtailed the extension and ordered the information to be filed by today, December 28th, 2016, with a scheduled hearing regarding the discussion of this matter on the same day. The court is expected to hear Hanjin’s request for approval of the same on January 12th, 2017.
As Hanjin struggles to juggle and solve all the issues that have arisen for them ever since announcing their bankruptcy protection back in August, the Mediterranean Shipping Company (MSC) and Hyundai Merchant Marine (HMM) originally submitted a joint bid to take over Hanjin’s part of the 25 year terminal lease, signed back in August of 2002 – but HMM later on withdrew from the joint bid mid-December, stating that they have instead decided to take a minority stake in Total Terminals from MSC if the European shipping line was approved of the deal. For a moment, Korea Line, South Korea’s second-largest bulk carrier, was also poised to throw their bid to take over Hanjin’s stake in the terminal, but that expectation was rebuffed.
The bid has finally been approved last Thursday, with MSC to take over sole control the Port of Long Beach’s “Pier T” container terminal for the long term. The exact value of the deal is still unknown, but approved by the Seoul Central District Court handling Hanjin’s insolvency proceedings since their criteria of this proceeding being endorsed by a U.S. Bankruptcy Court and the U.S. Port Authority was met. Formerly, the 385 acre Pier T was 54% majority held by Hanjin Shipping, with MSC holding the other 46%; however, ever since Hanjin Shipping has applied for receivership at the end of August this year, the company has taken steps to liquidate all their assets to pay back monies owed.
“This decision comes at a very crucial time. With all the changes that have taken place in the shipping industry in recent years, certainty is very important,” says Lori Ann Guzmán, President of the Board of Harbor Commissioners, adding “That while Hanjin’s bankruptcy was unfortunate, the approved agreement is a worthy deal to bring steady business to one of the country’s premier container terminals.” The new pact requires an upgrade installation of two new cranes capable of handling container ships with capacities of 20,000 twenty-foot equivalent units (TEUs) within the next three years; and was greenlighted by the Long Beach Board of Harbor Commissioners on December 22nd, 2016.
- Total Terminals International Tag (WorldMaritimeNews)
- Hanjin Sells US Terminal Stake to MSC (MaritimeProfessional)
- Mediterranean Shipping Company To Take over Long Beach’s Largest Terminal (GlobalTrade)
- Port of Long Beach Approves Sale of Hanjin Terminal Stake to MSC (Seatrade Maritime News)
- MSC Buys Hanjin Stakes in Long Beach, Seattle Terminals (JOC)