The Big Dilemma of Returning Hanjin Containers

As the Hanjin crisis continues to affect the shipping industry, over 500,000 containers are clogging up ports and truck yards at every major port worldwide. After going through the long process of allocating and finally getting your container released at the port, many face a much bigger dilemma after delivering the containers to their customers. The problem that many face after having your cargo finally released is determining where to return the empty containers. This has created a whole new set of expensive problems such as charges for chassis fee, per diem fee, storing the containers, etc.

These costs could be several hundred to several thousands of dollars for a single empty container. The good news is that Hanjin Shipping advised a US District Bankruptcy Court that they would not charge the shippers for returning the containers late, also known as “per-diem”. This was decided after negotiations performed by the Intermodal Association of North America (IANA), who represents the intermodal freight industry, requested the court to ban those charges.  Per-diem detention charges are controlled by the Uniform Intermodal Interchange and Facilities Access Agreement, which the IANA regulates. This agreement determines the terms which intermodal equipment is used by the shippers and trucking companies.

After Hanjin filed their Bankruptcy protection back on August 31st, it led to mass confusion for trucking companies and the related shipping parties, all trying to figure out where to return the empty containers along with the accompanying chassis. Many depots and terminals were not accepting the empties in fear that they would not receive the money owed by Hanjin. IANA informed the court that pursuant to the Uniform Intermodal Agreement, Hanjin is obliged to accept the return of the empty containers and chassis used as part of their business. Despite IANA’s efforts, there is still an inordinate amount of containers and chassis which are not being accepted. Hanjin is still mum about alternative return locations.

Leased Containers are Not as Big of an Issue

For leased containers, the problem is not as onerous as the owners have released a list indicating where to return the empty containers. The list was issued by the Container Owners Association and it details the markings on the containers and also includes the contact information for the respective owners. By knowing the owner of the container, the return location is accessible with a phone call or e-mail. This helps solve one of the major problems caused by the demise of Hanjin.

However, many still face the difficult and costly situation of leaving the empty containers on borrowed chassis and although importers will not pay per diem for those empty containers, they will still have huge chassis charges for the leased chassis.

For the Hanjin-owned empty containers, most of them are still sitting on a chassis at distribution facilities, depots and city streets because no one will pay the labor, delivery and storage charges to receive the units, remove the empty containers to release the chassis, and they do not want a flood of Hanjin empties sitting on their docks and contributing to congestion.

This Dilemma is Making Other Shortage Issues Even Worse

This exacerbates an already-existing dilemma of chassis shortages. Truckers in New York-New Jersey said the Hanjin bankruptcy has not resulted in a chassis shortage so far for these ports. The situation is much different on the West Coast ports, who previously have experienced brief shortages of chassis even when everything was functioning properly. Now adding the thousands of Hanjin containers sitting on chassis and in effect putting them out of commission, the chassis shortage will become a bigger problem as the holiday season nears and as more Hanjin ships arrive in ports and unload more containers.

In Southern California, shipping industry executives are discussing setting aside a staging area where truckers could drop off empty containers to free up trailers.

Federal Maritime Commission stated that they are also monitoring the prices to make sure that fees for leasing trailers do not become excessive amid the Hanjin problems.

Even some chassis owners have agreed to stop the clock on leasing charges as drivers search for a place to return empties but this is not the case nationwide.

In the last couple of days, some ports like NY-NJ, Oakland announced some return locations for Hanjin containers for short period of time and hopefully this will spread to all the other ports and we will see some improvements of returning these containers and freeing the chassis and putting an end to the extra costs in the upcoming days.