From steaks to furniture, Hanjin Shipping collapse to raise freight costs
By Karl Plume
CHICAGO (Reuters) - The collapse of Hanjin Shipping 117930.KS will boost the cost to U.S. businesses and consumers of a wide range of imported goods, from furniture and clothing to fresh fruit and frozen meat, according to federal agencies, shippers and retailers.
With Hanjin's future in doubt, carriers have announced they will hike container freight rates by as much as 50 percent beginning next month as retailers scramble to secure shipping ahead of the peak year-end holiday season, industry sources said.
United Parcel Service Inc (UPS.N: Quote) said on Thursday it is seeing a bump in demand for its freight services and is working with customers in Asia to shift goods from Hanjin containers to other ocean freight operators or air freight services. About $14 billion worth of cargo was stranded by the collapse of the seventh largest container carrier in the world.
"Right now, there is much more (freight) demand than there is supply. People are scrambling to find a carrier with space," said Peter Friedmann, executive director of the Agriculture Transportation Coalition shipping industry group.
"But the biggest challenge right now is for people with cargo on Hanjin ships," he said.
Cargo shippers have been forced to pay thousands of dollars in fees to terminal owners and truckers to reclaim their goods from Hanjin ships to prevent perishable foods from spoiling and to avoid losing sales because goods are not available when customers want them.
Hanjin would normally pay the fees for port usage and container handling as part of its freight services. With the South Korean shipper in receivership, it is unclear if shippers would recoup any added costs they pay out of pocket to retrieve their goods.
Singapore-based crop shipper Agrocorp International said that DP World, terminal operator at Port Metro Vancouver, last week held 24 containers, or 600 tonnes, of its Canadian lentils that were bound for India and Bangladesh, demanding a release fee of $450 per container. Continued...