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By Mike Wackett
Container lessors will take a multi-million dollar hit from the collapse of Hanjin Shipping in unpaid hire fees and the termination of hire contracts for 750,000 teu of equipment.
The lessors have issued an industry alert through the Container Owners Association (COA), that includes the Hanjin container types, prefixes and number range.
The move is a desperate call for assistance to help recover their containers.
The statement said: “If you come across any equipment previously on lease to Hanjin Line, this document will help you identify the rightful owner, and facilitate its return to the rightful owner.”
It also warns Hanjin creditors against placing a lien on their containers.
“Please be aware any attempt to interfere with legal rights of the container owners is unlawful, and the relevant company may respond accordingly, to enforce its rights.”
The lessors say they face a massive challenge to recover their containers.
The world’s biggest lessor, Textainer, appears to also have the biggest exposure to Hanjin. It said in a statement that the number of containers leased to Hanjin represented 4.8% of its 2.2 million teu fleet.
It said: “Significant costs may be incurred in recovering, repairing and repositioning containers leased to Hanjin.
“The rates achieved for re-leased containers may be substantially below those paid by Hanjin,” the lessor cautioned.
The equipment is scattered around the world: stuck on ships, locked into terminals and storage depots, arrested by creditors and abandoned by shippers who are being refused restitution by depots and terminals.
Meanwhile, lessor CAI International said it had about 15,000 containers on lease to Hanjin, representing $40m of equipment exposure.
Like its peers, CAI will be able to claim a certain percentage of its loss from insurers, but there will be substantial deductibles and other limitations.
CAI said: “At this point, while we are unable to estimate the total impact of Hanjin’s bankruptcy filing on our financial results, we believe our exposure will be limited to $2.6m of accounts receivable related to income recognised prior to the third quarter of 2016, which is not insured and may not be recovered, and up to the $2m deductible on our insolvency insurance policy.”
Nothing in recent history can compare, but when United States Lines (USL) declared Chapter 11 protection from its creditors in 1986 there were frantic attempts by hundreds of unpaid service providers around the world to arrest USL boxes.
It took the container lessors many months to recover boxes USL had on lease, involving legal action worldwide. And a year after the carrier had collapsed, there was still an estimated 25% of equipment that had not been accounted for.
Hanjin had mid- and long-term lease agreements with most of the world’s major container leasing firms for some 750,000 teu at the time it entered into receivership on 31 August.
Ironically, in order to prop up its balance sheet Hanjin had made a number of sale and leaseback deals with container lessors on owned equipment.
According to sources, the South Korean line was “significantly behind” on hire payments, as it was with vessel charter hire payments, stevedoring charges, bunker supply costs and had many other creditors.
In theory, Hanjin’s container control system should be able to determine the status of the containers, but it is unlikely that the data has been updated sufficiently since the carrier entered receivership.
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