A container ship has been "arrested" in Sydney Harbour as the collapse of Korean-based Hanjin, one of the world's biggest container shipping lines, spreads confusion around the world's freight network.
The Hanjin California could be stranded for some time at the Glebe dock in inner Sydney after Glencore Singapore won a Federal Court order impounding the ship over a debt owed for "bunkering", or ship fuel.
Hanjin, South Korea's biggest container company with 97 ships, filed for bankruptcy protection in Seoul last month, leaving scores of vessels effectively stranded at sea. Ports in the United States, Asia and Europe turned them away because Hanjin could not guarantee payment of port charges. Another Hanjin ship was arrested in the US last week.
Hanjin is one of many global shipping companies that are struggling because they expanded their fleets in expectation of growth in world trade that never eventuated.
Teresa Lloyd, chief executive of Maritime Industry Australia, an industry body, said other shipping companies are hoping that they will be able to capitalise on Hanjin's demise to build their own business. "The international shipping industry is in dire straits. Some people are hoping this is a "Lord of the Flies" moment where one company dies and the others survive."
Sensitive cargo
In the meantime the bankruptcy of Hanjin, a huge container line, will be more disruptive than similar recent failures in oil and bulk shipping because it carries sensitive consumer cargo which must be delivered in time for Christmas. Because of its global span, the Hanjin bankruptcy also threatens to take a long time to sort out.
The Hanjin California, with a capacity of 4000 containers, docked in the Port of Botany, Sydney's busy commercial port, on September 3 and most of the Australian cargo was unloaded.
The Federal Court then arrested the ship and ordered the Admiralty Marshall to move it out of Botany Bay and around to the little used dock in Glebe in Sydney Harbour. Since the ship could be stuck for some time, NSW Ports said it wanted to move it out of the way. "Vessels arrested at a port have the potential to impact on port operations and create uncertainty for cargo remaining on the vessel," it said.
John Lines, managing director of ANL, now French-owned but formerly Australia's national carrier, said ANL had about 100 containers from Indonesia on the Hanjin California as part of a cargo-sharing consortium which was unloaded in the Port of Botany. But he said a lot of other cargo that was for Hanjin's direct customers would remain on the ship in Glebe. "It could be there for a very long time," Mr Lines said.
He said Australian shipping had some protection from the shipping glut because the Port of Melbourne cannot take the really large container ships that have driven down shipping rates by as much as 80 per cent between Asia and the US. But he said shipping rates to Australia were still at "poverty level".
