Bloomberg News reports that the Hanjin bankruptcy has disrupted international commerce.
Hanjin Shipping’s vessels are getting stranded at sea after the South Korean container mover filed for court protection, roiling the supply chain of televisions and consumer goods ahead of the holiday season…
“Ports will not have these vessels because they are worried port and other fees won’t be paid,” said Rahul Kapoor, a Singapore-based director at Drewry Maritime Services. “This is going to play out for the next few weeks.”
…the National Retail Federation, a trade group in Washington D.C., said in a statement that retailers are concerned about “millions of dollars worth of merchandise that needs to be on store shelves” and could be “impacted by this.” Some of the merchandise, the federation said, is in Asia, and some is aboard ships waiting to dock.
The news is disturbingly similar to what we saw during the West Coast port slowdown more than a year ago. We wrote about the impact study published by the Washington Council on International Trade (WCIT). And just recently we noted with approval the news that a contract extension may be negotiated to assure long-term stability in port operations.
Seattle Times business columnist Jon Talton writes,
It didn’t take long for Hanjin Shipping’s bankruptcy Wednesday to reach the Northwest Seaport Alliance, which handles seaborne cargo for the Port of Seattle and Port of Tacoma.
Alliance spokeswoman Tara Mattina said this morning that Terminal 46 at the North Harbor (Seattle), Hanjin’s main home here, is not accepting any Hanjin deliveries. Husky Terminal in the South Harbor (Tacoma) is prepared to unload imports but not accepting any exports or empty containers. Both terminals have private operators…
The effects could be profound. Hanjin Shipping, one of the world’s largest lines with 98 ships, is now also the biggest container-ship company receivership in history.U.S. retailers are among those voicing concerns. Freight rates have risen as shippers rush to seek room on other carriers. That may not be as easy as it might seem. Yes, many ships are idle because of the worldwide shipping slowdown, but most can’t be quickly brought up to operation-ready status.
It’s hard to overestimate the importance of trade to our state. The Lens, in an article today on income inequality, reports:
Washington Council on International Trade President Eric Schinfeld told Lens that trade agreements help level the playing field between Washington industries and foreign competitors by providing equal access to their markets. This grows exports for local industries and means more jobs, he added.
“The biggest solution to income inequality is for more people to have good paying jobs,” he said.
In a Louisville Courier-Journal video, McConnell, R-Ky., said the next administration could renegotiate troublesome areas in the trade pact between the United States and 11 Pacific nations to win enough congressional votes to pass. The House and the Senate must each approve the trade agreement for it to take effect.
Reuters, however, reports the Obama administration hasn’t given up.
The successful conclusion of the Trans Pacific Partnership trade talks remains the top legislative item for the United States, a top economic adviser to President Barack Obama said on Tuesday.
We wrote in our foundation report,
Washington’s economy is highly dependent on global trade. The state ranks second in the nation in exports per capita. According to the Washington Council on International Trade, 40 percent of the jobs in the state are related to trade in some way. Given its many trade advantages, the state is well-positioned to continue to be a leader in international trade for years to come.
We hope the problems stemming from the Hanjin bankruptcy can be resolved swiftly, with minimal negative impact on commerce and trade. As well, we look forward to the restoration of the bipartisan consensus supporting global trade agreements.