Canal fallout from shipper bankruptcy

THE EUPHORIA  generated by the opening of the Panama Canal expansion  has been muted by the bankruptcy of the world’s seventh  largest shipping company.

The country is   bracing for the fallout from the demise of Hanjin Shipping, a  major user of the Canal.

Hanjin represents 1.2 percent of the transits through the Panama Canal. In addition to impacting the Canal revenues, the bankruptcy will also impact Panama’s ports and maritime service providers, and down the line the money the Canal Authority (ACP) pumps into the government’s coffers, and could lead to some revisions to the Finance Ministry’s rosy projections

Some 45 ships of the 100 owned by Hanjin, mostly container ships, are located in different parts of the world.

They have lost access to international ports after declaring the suspension of payments.

After asking for bankruptcy protection, Hanjin stopped accepting new orders and almost all of its assets were frozen.

The Guardian newspaper reported that the company will not be allowed to upload or download containers until they show they can pay dock workers and other fees.

 Government bail out
As a measure to avoid the impact on South Korean exports, the government of that country announced that it will spend $57 million to pay 457 contractors of the company.

This is expected to help continue the flow of electronic and household appliances manufacturing in that country.

The South Korean government also created a working group to examine the effect on South Korean exports.

The bankruptcy is an additional blow to South Korea’s image, coming within days of the recall of Samsung’s lastest Galaxy smartphone.