Hanjin Shipping bankruptcy impacts holiday deliveries

The last Hanjin Shipping vessel dropping off goods in California has set sail from the Port of Long Beach, finally clearing the many ships left stranded by the company’s sudden collapse two months ago. But in its wake, the giant shipping line has left a mess that retailers across the country will be sorting out for weeks.

The South Korean company’s bankruptcy is forcing big chains to spend piles of cash to get their goods through ports to warehouses in time for the busy holiday shopping season. Some mom-and-pop shops will have less to offer this year.

And once again, an unexpected disruption has pointed out the intricate links of the supply chain that feeds America’s consumer machine.

California’s ports took a short-term hit. Long Beach, the nation’s second largest port, reported a 15% year-over-year drop in import traffic in September. The port of Oakland saw imports decline by 4.2%.

For some wholesalers and retailers, the impact continues.

Ashley Furniture, which supplies couches, beds and dressers to the likes of J.C. Penney, Target and Wal-Mart, had the misfortune of being on the receiving end of 900 containers set to be transported by Hanjin.

For weeks, Hanjin vessels idled as port operators refused to touch the cargo without certainty of how they would be paid.

When the ships finally began to offload containers, Ashley, along with several other retailers, learned that Hanjin had canceled its promised “port-to-door” delivery.

Ashley executives hustled to fill the gap, hiring trucking companies to haul the wares from ports and contracting with new vessels to bring containers stranded in Singapore. In October, the company asked a New Jersey judge overseeing the shipping line’s U.S. bankruptcy proceedings to subtract Ashley’s costs from the fees it owes Hanjin.

So far, the company has spent more than $1 million to retrieve stranded containers and get the ones that have arrived in Los Angeles out of the ports. It managed to get clients their furniture on time, but making that happen will dent Ashley’s profits.

“It’s going to affect our bottom line. It’s all stuff that is additional bills out of our pocket,” said Margaret Pronschinske, vice president of supply chain planning at Ashley.
more at:  http://www.latimes.com/business/

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