Federal officials plea for intervention in Hajin bankruptcy to save jobs

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Congresswoman Loretta Sanchez (CA-46) speaks at South Korea’s Hanjin Shipping Co. in the Port of Long Beach.  Congress Members, Federal Maritime Commission Chair, and Labor Leaders Call for action on Cargo delivery crisis, as more than 45 ships loaded with a half million containers of cargo are stranded at sea due to the bankruptcy of one of the world’s biggest container-shipping companies, South Korea’s Hanjin Shipping Co.       Long Beach Calif., Sunday, September ,4, 2016.          Photo by Stephen Carr, Press-Telegram/SCNG
Congresswoman Loretta Sanchez (CA-46) speaks at South Korea’s Hanjin Shipping Co. in the Port of Long Beach. Congress Members, Federal Maritime Commission Chair, and Labor Leaders Call for action on Cargo delivery crisis, as more than 45 ships loaded with a half million containers of cargo are stranded at sea due to the bankruptcy of one of the world’s biggest container-shipping companies, South Korea’s Hanjin Shipping Co. Long Beach Calif., Sunday, September ,4, 2016. Photo by Stephen Carr, Press-Telegram/SCNG

Several Southern California members of Congress urged the U.S. secretary of commerce to intervene in the worldwide supply chain havoc caused by the collapse of South Korean Hanjin Shipping Co., which has left local workers’ jobs in limbo and threatens to spoil the holiday season for retailers.

At a news conference Sunday, Rep. Janice Hahn said she will ask Secretary of Commerce Penny Pritzker “to step in and start discussions with Hanjin and South Korea to come to an agreement that guarantees our ports and our workers will be paid.”

Hanjin is among the largest shipping companies in the world. But movement of its cargo was halted after it filed for bankruptcy in South Korea on Wednesday, just as the holiday shipping season gets underway in the United States.

“These ports are not only America’s ports but these ports contribute to the global economy and these ports have the impact of crippling that,” Hahn said.

Hahn was joined by Reps. Loretta Sanchez, D-Orange, Grace Flores Napolitano, D-Norwalk, and Alan Lowenthal, D-Long Beach, whose district includes the Port of Long Beach. Napolitano is a ranking member of the House committee on transportation.

The call for help echoed concerns by the Retail Industry Leaders Association, which sent a letter last week to the Federal Maritime Commission and Pritzker warning of the “ripple effect” the bankruptcy was having.

On Friday, Hanjin Shipping filed for Chapter 15 bankruptcy in New Jersey, the Wall Street Journal reported.

The move could help protect its cargo and ships from being seized by creditors and ease the standstill at port and rail lines, where Hanjin cargo has been rejected.

Jobs in limbo

Three ships remained stranded on Sunday, unable to dock for fear the vessels could be seized. And, as a result, the jobs of 200 to 300 workers were in limbo at Total Terminals International, the largest terminal at the Port of Long Beach. Hanjin owns a majority stake in the terminal, where work all but came to a standstill.

“We don’t come to work anymore, the gates have been shut,” said Mark Jurisic, who sits on the executive board of the International Longshore and Warehouse Union’s Local 13 that represents dockworkers.

A few workers remain inside and those who haven’t been called into work at the terminal find pickup jobs with the union, but doing that could imperil their current positions, said Paul Trani, president of ILWU Local 63, representing marine clerks.

“The most important thing that we need to do is ensure that the cargo keeps moving,” said Mario Cordero, chairman of the Federal Maritime Commission, which regulates the shipping industry.

Hanjin handles about 8 percent of all goods shipped by container from Asia. As the seventh-largest shipping company in the world, retailers in the United States depend heavily on it to bring everything from shoes to flat-screen televisions from the Pacific Rim, a top trading partner.

But the shipping industry has never recovered from the recession, Cordero said. Hanjin’s financial woes had long been documented but many believed that the South Korean government would bail the company out.

Industry in distress

Hanjin is not alone in its financial distress.

“The total industry loss for this year is projected to be $5 billion,” Cordero said. And there is concern about the future of the industry.

“All these carriers thought things would substantially improve (after the recession) and they ordered bigger ships,” he said. “Now the problem is overcapacity.”

Since Hanjin’s bankruptcy, shipping rates have soared.

The cost to ship a 40-foot container from Shanghai to Los Angeles has more than doubled to $1,700 from $700 in June, Cordero noted.

“This is a case study in what happens when we are a global economy,” said Sanchez, using the opportunity to raise questions about trade deals that she said allow international companies to hurt American workers.

“They have overcapacity and they are charging their mistakes to consumers, the price of overcapacity.”



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