Hanjin Shipping Co.'s vessels are getting stranded at sea afterthe South Korean container mover filed for court protection,roiling the supply chain of televisions and consumer goods ahead ofthe holiday season.

LG Electronics Inc. is trying to find new carriers for itsgoods, the world's second-largest manufacturer of televisionssaid. Shipments through Hanjin account for between 15% and 20% ofLG's deliveries to America. Hyundai Merchant Marine Co., the nation'ssecond-biggest container line, stepped in saying it plans to add 13 more vessels to ease the squeeze.

Woes at Hanjin Shipping, South Korea's largest sea containershipping firm and the world's seventh-biggest with a 2.9% marketshare, are derailing the supply chains of companies that need tosend goods well in advance of the year's biggest shopping season asThanksgiving and Christmas holidays approach. TVs, cars andsneakers sail about 10 days to reach Los Angeles from Asia whilethey could take as many as 30 days to Rotterdam. Hanjin Shippingowns 59 of the 132 container and bulk ships in its fleet.

“Ports will not have these vessels because they are worried portand other fees won't be paid,” said Rahul Kapoor, a Singapore-baseddirector at Drewry Maritime Services Pvt. “This is going to playout for the next few weeks.”

On Thursday, the Seoul Central District Court accepted thereceivership application Hanjin made Aug. 31. A revival plan mustbe submitted by Nov. 25, said the court, which also named thecompany's Chief Executive Officer Seok Tae Soo as the manager.

Three of Hanjin's vessels were stuck off the Los Angeles-Long Beach port complex, while one was strandednear the Port of Prince Rupert in British Columbia, Canada. Workersin the Korean port of Busan refused to work on a ship because thecompany hasn't paid dues, forcing the cancellation of a berthing.Another was seized in Singapore late Monday.

About 10 more were impounded at Chinese ports, including Tianjinand Shanghai, for failing to pay service providers, the KoreaInternational Trade Association said.

“The company is internally looking into measures in case ourcargo gets stranded while it's being shipped,” LG said in the emailin a response to a Bloomberg query.

Bonds Tumble

Hanjin Shipping's local-currency notes due June 2017 tumbled to13.4% of face value as of 3:29 p.m. in Seoul, according to KoreaExchange prices, after fetching 90% in March. Trading in its shareswere suspended after a 24% plunge Tuesday to their lowest levelsince December 2009.

About 70% of South Korea's overseas shipments is through sea, ofwhich Hanjin Shipping accounts for about 6%, according to CheongSeung Il, a trade ministry official. While the government doesn'texpect a large impact on exports, there could still be some issueswith machinery and textiles shipped via Hanjin, he said.

“Some of their clients would be worried about getting theircargo if the vessels can't enter ports,” said Shin Ji Yoon, ananalyst at KTB Investment & Securities Co. in Seoul.

Hyundai Merchant plans to add four vessels to the U.S. startingSept. 9, and nine on Europe routes later this month. Japaneseshipping companies Kawasaki Kisen Kaisha Ltd. and Nippon Yusen KKsaid they are working to limit delays to clients' cargo.

Kawasaki Kisen, which is in the same shipping alliance as Hanjin Shipping, is studying theimpact of the Korean company's filing, Masaya Futakuchi, a companyspokesman, said by phone. Nippon Yusen isn't part of the samealliance but has a business partnership with Hanjin, spokesmanBrandon Kitamura said.

Freight charges from South Korea surged about 50% after HanjinShipping filed for court receivership Wednesday, Korea EconomicDaily reported, citing shipping industry officials it didn'tidentify. The fees on Hanjin's main shipping route between Busanand Los Angeles have jumped 55% to $1,700 per 40-foot equivalentbox from $1,100, it said.

Failed Efforts

Hanjin Shipping filed for court protection Wednesday afterlenders rejected its restructuring proposal, scuttling revivalefforts by the firm that's been trying to reschedule debt under avoluntary creditor-led program since May. Hanjin's woes reflectthose of an industry that's been operating at a loss since the endof 2015 and set to lose about $5 billion this year amid anoversupply of vessels, according to Drewry.

The possibility of a liquidation can't be ruled out, though acourt will determine the fate of Hanjin Shipping, said Yim JongYong, chairman of South Korea's Financial Services Commission, incomments e-mailed by the regulator.

Hanjin Shipping is part of Hanjin Group, which also owns KoreanAir Lines Co., the world's third-largest cargo airline. Korean Airloaned funds to Hanjin Shipping and bought shares in the containerline in 2014 to become the biggest shareholder with 33%. The group,which also counts airport services, logistics and mineral wateramong its businesses, is headed by Chairman Cho Yang Ho.

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