Hanjin says has cash to begin unloading four US-bound ships

The squeeze caused by Hanjin Shipping pushed up freight rates on a key route to their highest level in more than a year.

This potential bankruptcy, which would mark the largest failure of a container shipper in history, stranded 45 ships at sea, as the company is concerned that creditors would seize the cargo if the ships docked (as has happened in Singapore and some ports in China).

The ocean freight industry has never seen a container carrier of Hanjin Shipping's size go under before.

The global shipping disruption comes just as companies are sending off merchandise to fill shelves and warehouses for the year-end holiday season.

"We did have a limited number of containers hung up on those ships; there's going to be some pricing pressure at this point", chief executive officer John Idol said Wednesday at a conference in NY.

South Korean authorities, criticised for propping up failing companies in the past, have shown little appetite to step in to save Hanjin.

Earlier, Hanjin Group pledged to offer some 100 billion won ($91.4 million), including 40 billion won of group Chairman Cho Yang-ho's personal assets, to help ease the cargo crisis. Last week, creditors led by the Korea Development Bank rejected a plan by Hanjin Group to spend another 500 billion won ($447.2 million) to rescue the shipping firm, way short of Hanjin Shipping's more than 6 trillion won ($5.37 billion) in debts.

The motion prohibits US creditors from taking immediate actions against the company's ships and other assets.

According to the ministry, Hanjin Shipping now operates 73 containers ships on the sea.

But they added, "There may be some exposure for branded goods that the department stores purchase as they are unsure at this point which of their vendors may use Hanjin".

But shippers and brokers say the rulings don't solve the problem as it is unclear if Hanjin will be able to afford to have the ships unloaded once the vessels are docked.

While Hanjin's filing was not the only factor (China's upcoming Golden Week holiday is also contributing), the shipping price from China to the USA west coast rose from $1,100 per container to as much as $1,700, and the price from China to the US east coast from $1,700 to $2,400 last week. One journey over the Pacific from Busan to Los Angeles will take up to 10 days, while the journey over the Suez Canal to Rotterdam can last a month.

Typically, a vessel that can carry 8,000, 20-foot containers costs about $8,376 to operate per day, according to Drewry Maritime Services, an independent ship consultancy.

Samsung Electronics also filed support on Tuesday for Hanjin's petition, saying it has about US$38 million (S$51 million) in merchandise on two Hanjin vessels, off the Californian coast, that are not able to dock without a USA court order protecting the company against creditors trying to seize the cargo.

Troubled South Korean firm Hanjin Shipping has been granted temporary bankruptcy protection in the U.S.

The world's seventh largest shipper's bankruptcy filing has put global commerce into trouble.

Helped by cheap loans, container lines have hung on even as freight rates to move sneakers to Barbie dolls from Asia to Europe and the USA plunged on sluggish demand.