“Tremendous Ripple Effects” – Retailers Demand Bailout After Hanjin Collapse Paralyzes Trade
This is an example of what is wrong with globalism. If we actually had a real manufacturing base, there would be no need to import vast amounts of finished products. Globalism is about profits and control by the major corporations. – Shorty Dawkins, Associate Editor
When we first reported about the imm inent paralysis of an unknown number of global supply chains and a potential shock in worldwide trade as a result of the historic bankruptcy of Hanjing Shipping, one of the world’s largest container shipping companies which handles 8% of Trans-Pacific trade volume for the US market, we concluded that “the global implications from the bankruptcy are unknown: if, as expected, the company’s ships remain “frozen” and inaccessible for weeks if not months, the impact on global supply chains will be devastating, potentially resulting in a cascading waterfall effect, whose impact on global economies could be severe as a result of the worldwide logistics chaos. The good news is that both economists and corporations around the globe, both those impacted and others, will now have yet another excuse on which to blame the “unexpected” slowdown in both profits and economic growth in the third quarter.”
However, not even this extreme forecast captured what would happen just 48 hours later, when as the WSJ reported overnight, retailers have gone far beyond simply blaming the Hanjing bankruptcy for their upcoming woes: they are petitioning for a government bailout, or as the WSJ put it, they are “bracing for a blow as they stock up for the crucial holiday sales season, asked the government to step in and help resolve a growing crisis.”
Or, as America’s banks would call it, “get bailed out.” And, in taking a page right out of the 2008 bank bailout, the doom and gloom scenarios emerge:
“While the situation is still developing, the prospect of harm is significant and apparent,” Sandra Kennedy, president of the Retail Industry Leaders Association, wrote in a letter to the Department of Commerce and the Federal Maritime Commission. Hanjin’s recent bankruptcy filing “presents an enormous challenge to U.S. shippers,” she said, and “could have a substantial impact on consumers and the economy at large.”
The trade group is urging the U.S. to work with ports, cargo handlers and the South Korean government to resolve the widespread disruption in freight shipments caused by the Hanjin bankrupcy filing. Futhermore, the spokesman for the Retail Industry Leaders Association said they’re hoping the South Korean government could help provide clarity and speed to the bankruptcy proceedings, which are being considered by courts there.