The failure of a Korean shipping company is having ripple effects on Wilmington’s key asset and North Carolina’s economy.
Hanjin was the world’s seventh-largest shipper. When it filed for bankruptcy protection in August, it was moving an estimated $14 billion of goods, including some flowing through the Port of Wilmington. Much of the cargo has been stranded as lawyers and courts try to untangle the complex global mess.
The N.C. State Ports Authority relies on Hanjin for about 7.5% of its annual revenue. That is about $3 million based on the authority’s revenue of $43 million in the fiscal year ended June 30, 2015. The Korean shipper also owes the authority “a lot less than $1 million,” Executive Director Paul Cozza says.
Most important, Hanjin’s service connecting Lowe’s, Ashley Furniture and others companies is an important asset for North Carolina, just as American Airlines’ international service from the Charlotte and Raleigh airports connects the state to the world.
Given the troubled state of the global shipping industry, with many companies reporting large losses, replacing Hanjin could be a lengthy process, says a business owner familiar with the Wilmington port and the shipping industry.
But Cozza is confident Wilmington can attract other shippers to replace the Hanjin service.
“In the medium term, we are confident we’ll get another Asia service. It won’t be with Hanjin because they are probably gone.” A promising potential replacement is Yang Ming Marine Transport Co., a Taiwanese shipping company, he says.
Two large container ships have stopped at Wilmington since the port completed an expansion of its turning basin, though neither delivered imported products. One is pictured above, the Evergreen Ever Laden.
A large N.C. company affected by the Hanjin collapse is Wisconsin-based Ashley Furniture Industries, which employs more than 1,500 people in Davie County. It has had to pay to transport furniture from U.S. ports, even thought it had previously paid Hanjin to make the deliveries, according to a Sept. 23 Reuters report. And Ashley is paying as much as $7,000 daily for storage and other fees for empty containers that ports have been unwilling to take back.
Prospects for the N.C. Ports have been improving because of increasing state investment in roads, cold-storage space, dredging and other infrastructure. The goal is to help sites in Wilmington and Morehead City become more competitive with larger peers in Charleston, S.C., Savannah, Ga., and elsewhere.
