Latest / Bloomberg Intelligence / Satish Jindel on Suppliers Hurt By Hanjin Shipping Woes (Audio)

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Satish Jindel on Suppliers Hurt By Hanjin Shipping Woes (Audio) · Bloomberg Intelligence

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  Speaker 1: very much, Bill Maloney, And to hear live breaking news
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  Speaker 1: Flash Busy's taking stock with Deatheimox on Bloomberg Radio. If
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  Speaker 1: you happen to be waiting for any of your apparel
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  Speaker 1: for Ralph Lauren or perhaps Michael Cores, indeed you might
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  Speaker 1: have to wait just a little bit longer. Why because
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  Speaker 1: suppliers such as Michael Cores and and Hugo Boss, as
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  Speaker 1: well as Ralph, Lauren Marx and Spencer in the United Kingdom.
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  Speaker 1: They're all scrambling to try to figure out how to
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  Speaker 1: get their products to the actual customers because of the
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  Speaker 1: bankruptcy of a Hudjen shipping company. This is South Korea's
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  Speaker 1: shipping company and one of the largest in the world.
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  Speaker 1: Here to tell us more about it is satishe Jendal.
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  Speaker 1: He is the president of s J Consulting Group and
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  Speaker 1: he joins us from Swickly, Pennsylvania. Satish, thank you for
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  Speaker 1: being with us. All right. So, if I'm a retailer
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  Speaker 1: and I am left hanging by Hunjin shipping companies bankruptcy,
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  Speaker 1: what is the state of affairs? What what am I facing?
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  Speaker 1: I'm facing a delay in the production of my products
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  Speaker 1: that are dependent on some of those raw materials getting
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  Speaker 1: to the manufacturers, and then I'm delayed with the products
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  Speaker 1: finished months getting to my distribution centers or my stores,
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  Speaker 1: and uh I will be including a higher cost. Even
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  Speaker 1: if I am using other shipping lines going forward for
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  Speaker 1: the products that I will get in the next few months,
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  Speaker 1: their rates are higher, So the cost is going to
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  Speaker 1: be high for everyone, even if your cargo is not
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  Speaker 1: on those ships, And I guess it's it's there's a
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  Speaker 1: lot of there's so many suppliers along the way to
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  Speaker 1: get to Nike, Hugo, bas some of these big companies.
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  Speaker 1: So that's I guess why this is so complicated. But
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  Speaker 1: what about the alternatives in terms of other shipping companies
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  Speaker 1: or flying in a plane or you know, starting to
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  Speaker 1: move things around otherwise, those are all options that just
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  Speaker 1: at UH. One has to be aware that other shipping
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  Speaker 1: lines UH can't fill in a void like this in
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  Speaker 1: such a short time. There is an adjustment period that
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  Speaker 1: has to be understood. Plus, if you want to fly
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  Speaker 1: on the planes UH, there are only few airlines that
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  Speaker 1: have dedicated cargo planes and many of them are already
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  Speaker 1: booked in spaces committed with other customers. So to get
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  Speaker 1: that excess space, the game will be at a premium
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  Speaker 1: and UH conna cause some disruption for everyone in the process.
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  Speaker 1: But the thing that ship would need to realize that
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  Speaker 1: they were the beneficiary of the over capacity and very
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  Speaker 1: very low unrealistic rates and they should have expected that
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  Speaker 1: someone is gonna go broke at those low rates. Now,
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  Speaker 1: So teach there are vessels hygen shipping vessels that are
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  Speaker 1: just anchored off the coast of Long Beach, California. For example,
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  Speaker 1: Samsung says that they have goods on board those vessels
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  Speaker 1: and if they can't move them, they're gonna have to
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  Speaker 1: figure out new ways to get those goods into their
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  Speaker 1: factories in Mexico in order to build refrigerators and washing
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  Speaker 1: machines and so on. Is this, Uh, why wouldn't they
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  Speaker 1: just dock? Is is there something about the ships not
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  Speaker 1: coming into port that is meaningful? Well, no, I think
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  Speaker 1: they will be able to dock, and tickets just being
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  Speaker 1: able to talk to and correct a problem. The question
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  Speaker 1: is do you have to gain get those containers unloaded,
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  Speaker 1: and who's gonna pay for it? That is unclear. Well. Now,
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  Speaker 1: it's interesting though, because the obviously a lot of these
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  Speaker 1: big companies are lobbying their their their government officials. It's
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  Speaker 1: happening in the US where one group, the Retail Industry
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  Speaker 1: Leaders Association, is urging US Secretary of Commerce Penny Pritzker
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  Speaker 1: and the Federal Maritime Commission Chairman Mario Cordero to intervene.
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  Speaker 1: We've seen some last ditch efforts efforts by Hygiene itself
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  Speaker 1: to provide more money, and then South Korea's ruling already
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  Speaker 1: is asking the government to offer about a hundred billion
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  Speaker 1: one of low interest los. How likely that all forces
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  Speaker 1: will come together and say, yeah, we just better make
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  Speaker 1: sure they stay on their feet long enough and and
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  Speaker 1: don't go down to cause so much damage to so
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  Speaker 1: many entities. You know, even if they're able to make
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  Speaker 1: it happen with their guard works interest, the amount of
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  Speaker 1: time it would take is not in the interest of
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  Speaker 1: The better solution would be for the customers whose products
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  Speaker 1: are in the containers on the ships that could dock
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  Speaker 1: on the ports of l A and Long Beach has
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  Speaker 1: agreed to pay for all the docking and the unloading
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  Speaker 1: of the containers, and that would be cheaper than flying
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  Speaker 1: the products around and take responsibility for covering the cost.
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  Speaker 1: That would be a faster and a cheaper solution. So teach,
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  Speaker 1: is anyone going to benefit from this? Perhaps other shipping
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  Speaker 1: companies where the other shipping companies are going to benefit absolutely,
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  Speaker 1: But in addition to that in this country, in US,
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  Speaker 1: the truckers are going to benefit. Company like a Crossport
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  Speaker 1: Services Group which has those seven six seven feet of faircraft,
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  Speaker 1: they will probably manefest because some of those products will
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  Speaker 1: then have to be moved faster to make up for
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  Speaker 1: the last time. Alright, Satis Gindal, you have quite a handle,
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  Speaker 1: quite an understanding the big picture and some of the
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  Speaker 1: details that are so important to big companies. There are
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  Speaker 1: suppliers around the world, as the Korean shipping company Hanjen
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  Speaker 1: is filing for bankruptcy. Very important was stif said, they
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  Speaker 1: couldn't expect those low shipping rates they were paying to
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  Speaker 1: go for so long and not cause a bankruptcy from
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  Speaker 1: someone they depended on. Very interesting. I'm Kathleen Hayes. Along
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