Hanjin Group CEO apologises for shipping chaos

SEOUL — The chairman of South Korea’s Hanjin Group has apologised for the “cargo chaos” caused by the collapse of its shipping unit, but insisted the company could, and should, be salvaged.

Hanjin Shipping, the world’s seventh largest shipping company, is seeking bankruptcy protection at home and in the US after creditors rejected its latest plan to deal with a US$5.37 billion (S$7.36 billion) debt.

Its bankruptcy would be by far the largest in the history of container shipping, which is suffering its worst downturn in six decades because of slumping global trade and a slowdown in China.

“I apologise to the public for causing concern over the cargo chaos,” Mr Cho Yang-Ho, chairman and CEO of Hanjin Group, was quoted by Yonhap news agency as saying on Tuesday (Oct 4). “But I want to say that we have done everything we can do to save the shipper,” Mr Cho told a parliamentary hearing.

Hanjin Group, which also owns Korean Air, is providing 100 billion won (S$123 million) in emergency funds to the troubled shipping unit, which includes a personal donation of 40 billion won from Mr Cho.

Meanwhile, in Singapore, online shopping services provider Ezbuy said eight of its containers were affected by the Hanjin incident, affecting about 8,000 shoppers.

Ezbuy (formerly known as 65Daigou) helps shoppers buy and ship their goods from, among others, Chinese e-commerce giant Taobao. It offers a Prime membership that allows shoppers to ship an unlimited number of items to Singapore for a rate of S$2.99.

Ezbuy said it received news that eight of its containers were affected early last month, with delays ranging between a few days and two weeks

Most of the containers contained bulky items such as furniture, light fittings, home and gardening items ordered by its Prime members.

“The impact was quite intensive. Eight containers could (mean) 8,000 customers were affected by the delay,” Ezbuy co-founder Liu Wenyu told TODAY. “We engaged help from other freight forwarders to get our containers and re-shipped them to Singapore, that’s why the longest delay was two weeks,” she added.

“Upon receiving the news, we contacted the relevant parties immediately to find the status of the affected containers and the scale of the impact. We tried our best to get those containers re-shipped to Singapore and in the meantime also sent emails to affected customers to update them of the situation and let them know when they could expect their items. By Sept 23, all affected items had been resolved.”

In addition to causing delays to its customers, the Hanjin incident has also made a dent on Ezbuy’s finances.

“For some severely delayed items, we compensated customers according to our on-time shipment guarantee policy, even though this was something out of our control (and) we could be exempted from the policy,” Ms Liu said.

But because of the sheer size of Hanjin in the industry and its capacity, its collapse could have wider ramifications, Ms Liu said.

“Not only did we have to pay a premium to get other freight forwarder to help us quickly fulfill those eight affected containers, we foresee in the upcoming peak shopping season, freight costs will rise due to demand and supply imbalance,” she added.

However, she added, Ezbuy does not have plans to revise its shipping charges because it “wish to minimise the impact on our customers”. WITH ADDITIONAL REPORTING BY LEE YEN NEE