* Of 98 container ships, 44 blocked from ports- company
* Manufacturers, retailers, freight forwarders on edge over
* U.S. firms take legal action over unpaid bills
* Hanjin suspended from CKYHE shipping alliance
* Hanjin shares to resume trading on Sept. 5
(Recasts, adds legal action, comments from freight forwarders)
By Joyce Lee and Keith Wallis
SEOUL/SINGAPORE, Sept 2 Roughly half of Hanjin
Shipping Co Ltd's container vessels have been
blocked from ports since the South Korean firm's collapse,
putting manufacturers and their customers increasingly on edge
about the fate of cargo and spikes in freight costs.
Woes for world's seventh-largest container shipper have only
deepened since its banks withdrew support and it filed for court
receivership this week. One vessel has also been seized by a
creditor in Singapore while firms in the U.S. have launched
legal action against Hanjin to seize vessels and other assets
over unpaid bills.
The potential for cargo to be stranded, perhaps
indefinitely, is unnerving for many - particularly as industry
insiders and analysts believe that Hanjin has little chance of
being rehabilitated and its assets will eventually be
"The biggest problem is what is going to happen to cargos at
sea. We are just praying that our cargos are not seized," said
Ra Kyung-moon, executive vice president at Forman Shipping, a
freight-forwarding firm in Seoul.
Freight-forwarding firms, which organise shipments, may be
held liable for customer cargo that doesn't arrive and are also
worried about the recovery of funds paid to Hanjin in advance
for services promised.
Some manufacturers are drawing up contingency plans while
the U.S. Retail Industry Leaders Association has called on
Department of Commerce and the Federal Maritime Commission to
take action to minimise disruption.
A Hanjin spokeswoman told Reuters that 44 of its 98
container ships had been denied access to ports including
Shanghai, Sydney, Hamburg, and Long Beach, California.
These include instances where lashing firms have refused
service, or where port authorities have blocked entry.
But service for Hanjin ships resumed at South Korea's main
ports of Busan and Incheon on Friday after the government said
port authorities would guarantee payments for service providers.
On Thursday, a Korean trade group said about 10 Hanjin ships
were effectively seized in China. Hanjin said on Friday that
number was incorrect.
SHIPPING COSTS SOAR
Freight rates have also surged. Hanjin's collapse has come
during the shipping industry's busiest season ahead of the
"The cost of shipping is now jumping through the roof and
carriers are filing requests for a full increase in rates from
Sept. 1," said Paul Tsui, managing director of the Janel Group
in Hong Kong, a freight forwarding and logistics firm.
He added that air freight volumes would probably rise to
replace urgent orders stranded in ports or at sea.
Hanjin accounts for 7.8 percent of trans-Pacific trade
volume for the U.S. market and has a global client base. Of
8,281 owners of goods to be transported as of late August, 847
were South Korean firms, according to government data.
This week, a judge in California ordered the arrest of the
Hanjin Montevideo container ship in Long Beach over unpaid fuel
bills totaling $488,750 owed to World Fuel Services, according
to court documents seen by Reuters.
Lawyers acting for two other firms, Hastay Marine and
Montemp Marine, applied on Aug. 31 to a court in California to
have Hanjin's assets in the U.S. including cash and property
totaling more than $3 million seized to pay outstanding rental
payments on two Hanjin ships, court documents showed.
Adding insult to injury, Hanjin has also been suspended from
the CKYHE shipping alliance, which includes China COSCO
, and Evergreen Marine Corp Taiwan Ltd.
A South Korean court has ordered the start of rehabilitation
proceedings and set a Nov. 25 deadline for the carrier to submit
a plan, appointing Hanjin Shipping CEO Suk Tai-soo as trustee.
Hanjin's shares, suspended since plunging 24 percent on
Tuesday, will resume trading on Sept. 5, the stock exchange
(Additional reporting by Hyunjoo Jin, Se Young Lee and Yun Hwan
Chae in SEOUL; Editing by Tony Munroe and Edwina Gibbs)