The Near Collapse Of A Major Shipping Company Could Have 'Substantial Impact' On Consumers, Retailers

South Korea-based Hanjin Shipping Co is one of the largest container shipping companies, and it may be on the verge of bankruptcy.

According to Reuters, Hanjin lost the support of banks after a funding plan submitted by its parent group was not sufficient to address its nearly $5 billion debt load. A potential bankruptcy announcement would represent the biggest ever for a container shipping company, and retailers are rightfully concerned.

The Wall Street Journal quoted Sandra Kennedy, president of the Retail Industry Leaders Association as telling the Department of Commerce and the Federal Maritime Commission that the prospect of harm is "significant and apparent." She added that it also represents "an enormous challenge to U.S. shippers" and "could have a substantial impact on consumers and the economy at large."

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The Wall Street Journal also noted that Hanjin accounts for nearly 8 percent of all trans-Pacific trade volume for the U.S. market. Meanwhile, terminal operators, ports, cargo handlers and others are refusing to handle Hanjin's cargo out of uncertainty in the company's direction.

Cargo destined for the United States has been delayed at their respective point of origin while already delivered cargo is sitting unhanded in U.S. ports. In addition, Hanjin ships are being seized by creditors across the world and have been turned away from ports across the United States, China, Canada, Spain and elsewhere.

Finally, the Wall Street Journal stated that the most likely retailers to be affected include Wal-Mart Stores, Inc. WMT, Target Corporation TGT, J C Penney Company Inc JCP and several clothing retailers.

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