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Container cost fear after shipping line goes under

shipping container sfbay

Exporters are taking stock of the failure of South Korean container carrier Hanjin Shipping, the world’s seventh-largest line by capacity.

The company filed for bankruptcy protection on 30 August. US and Chinese ports are reported to have been turning away its ships.

A Northern Ireland operator, Vanden Recycling, expected the Hanjin receivership to cause disruption for some UK exporters of recycled materials.

Managing director David Wilson said: “With ports in China blocking access to Hanjin vessels, there will be a large number of containers trapped on the water, at least in the short term.

“Eventually, I would hope that this material would find a destination once the receivership picture becomes more clear. We will be working hard to ensure the small number of loads we have with Hanjin at present will go to where we intended.”

He said shipping costs could increase because there will be less competition in the market.

Vanden Recycling is a UK subsidiary of Vanden Global – which was founded in Hong Kong in 2005 and has expanded from its Hong Kong headquarters to locations in Asia, Europe and Australia.

The Wall Street Journal reported that the filing of protection from bankruptcy came the day after the state-run Korea Development Bank, the company’s main creditor, withdrew its support. It said that a funding plan by Hanjin’s parent group was insufficient to tackle the shipper’s debt, which stood at $5.5bn (£4.15bn) at the end of June.

The South Korean court will determine whether Hanjin should be liquidated or given a chance to survive after restructuring.

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