- THE Alliance last week amended its agreement to clarify language and add further details on how to finance "protections" in the case of a member carrier's insolvency, according to the U.S. Federal Maritime Commission (FMC).
- The filing seeks authority to establish, earmark funds for, and determine the rules for using a contingency fund should a member file for bankruptcy, The Loadstar reports. As an example, the amendment clarifies the fund could be used to ensure the bankrupt carrier's vessels can call upon ports without delay.
- The measures are a clear response to Hanjin Shipping's bankruptcy last year, which sorely affected the other lines affiliated with the South Korean carrier. For weeks, containers were stranded on Hanjin vessels worldwide, including those belonging to other carriers' customers due to vessel sharing agreements.
Almost exactly 12 months ago, the shipping world was rocked by news of Hanjin's sudden announcement of bankruptcy, which resulted in severe repercussions and anxiety within the industry.
Since then, shippers have remained on edge, and are far more attentive to the financial condition of various lines and their alliance brethren, despite vastly improved profits and a healthy industry outlook. Now, with Yang Ming remaining in the red, THE Alliance — comprised of Yang Ming, Hapag-Lloyd and the merging NYK, K Line and MOL — is making every effort to prevent a Hanjin-like recurrence within their own consortium.
Industry experts approve such actions, although no other shipping alliances have followed suit with a similar protective clause.
"I firmly believe that if a carrier joins an alliance, it is the responsibility of the alliance members to ensure the cargo gets to where it needs to go," Federal Maritime Commissioner William Doyle wrote in an e-mailed statement. "If a carrier fails and that carrier is party to an alliance, the cargo carried on the failed company’s ships may only equate to a fraction of the container volume carried. The majority of containers may belong to the other carriers in the alliance."
In turn, Doyle writes carriers are responsible for protecting their cargo even if it is transported on another shipping line's vessel. "My point is this — Hanjin was carrying the cargo not only of Hanjin but of the other alliance members of CKYHE as well," Doyle wrote. "Everyone suffered in the ocean maritime transportation chain. So it is essential that all take responsibility. The responsibility is to get the ship into port and get it unloaded, get the empties on board and get the ship back out to sea."
Stakeholders are invited to offer comment by Aug. 26, 2017.