The American Soybean Assocation (ASA) and several ag organizations sent a letter to U.S. Department of Commerce Secretary Penny Pritzker urging engagement with the South Korean government to bring a swift resolution to the Hanjin Shipping Company bankruptcy situation this week.

The letter expresses concern and anxiety among shippers, as to when Hanjin ships will be allowed to enter ports, if their goods will be seized by Hanjin’s creditors once they are docked and the status of critical cargo that remains at overseas ports.

ASA and our soybean industry partners are monitoring the situation for impacts to soybean shipments. Other agricultural groups signing onto the letter include American Farm Bureau Federation, National Grain & Feed Association, National Pork Producers Council and National Cattlemen’s Beef Association.

On Friday, Sept. 2, Hanjin Shipping, Korea’s largest container carrier, filed for recognition of its Korean insolvency proceeding in the United States under Chapter 15 of the U.S. Bankruptcy Code. The Chapter 15 proceeding could extend the effect of the Korean filing and result in a stay from U.S. bankruptcy courts from creditors seizing Hanjin assets in the U.S.

While the company’s assets slightly exceed its liabilities, the court noted Hanjin Shipping has incurred a net-loss each term during the past three years. The company experienced a net loss of 463 billion won in the first half of this year, and losses of about 22 billion won in 2015, 463 billion won in 2014 and 712 billion won in 2013.The order noted the shipping industry has deteriorated since the 2008 global financial crisis because of a contracting global economy, lack of demand, reduced cargo volume, excessive supply of ships and drop in freight charges.

On Sept. 16, the International Longshoremen’s Association (ILA) refused to work Hanjin containers at East Coast/Gulf Coast ports because Hanjin is in arrears on the container royalty payments.  The situation was resolved and Hanjin is working on a solution for the container royalty money that was owed prior to the bankruptcy.  For current containers, there is a process at each port that shippers can pay for the royalty on the container they are trying to pick up.