September 29, 2016 11:00 AM, EDT

Houston Port Credited for Being 'Creative' to Move Hanjin Cargo

Tim Rue/Bloomberg News

Port of Houston Authority officials acted quickly to deliver stranded cargo after Hanjin Shipping Co. sought bankruptcy protection, offering to move and release the containers for a reduced fee. Those actions were praised and retroactively approved Sept. 27 during the monthly Port Commission meeting.

"This was absolutely being creative on the fly," chief port operations officer Jeff Davis said.

To help cargo owners receive their goods in a timely manner, port officials offered to let the cargo owners pay a portion of the fee that is normally assessed the shippers. Technically, the Port Authority didn't have the legal ability to charge cargo owners. Officials decided it was better to seek retroactive approval than wait nearly a month for the next Port Commission meeting.

"It was all about getting the freight to the beneficial cargo owners," Davis said.

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That saga is almost over as the final ship carrying Hanjin cargo arrived in Houston last week. About 200 loaded containers remained at the Port Authority Sept. 27.

A total of four ships, each carrying about 400 Hanjin import containers, have called on the Port of Houston since the South Korean shipping company sought bankruptcy protection in South Korea and the United States. One ship was in Houston and three others were on their way when the announcement was made. Hanjin has not accepted new shipments since seeking protection.

When the first two ships arrived in Houston, cargo owners initially paid $100 per container to cover the Port Authority costs. That was increased to $225 to cover stevedore costs, too. Hanjin later paid the full $300 container fee for the final two ships.

Larry Gross, partner and senior consultant at FTR Transportation Intelligence, said ports across the country are off-loading cargo in a variety of ways.

"It's a very mixed bag from what I can gather," he said. "There's all different approaches."

Mark Szakonyi, executive editor of, the online arm of the global shipping publication Journal of Commerce, said ports across the U.S. are returning to normal as the Hanjin-induced chaos calms down.

The next question, he said, is if Hanjin will become a smaller regional carrier, go bust or be acquired by another container line.

Gross thinks it's unlikely that Hanjin will emerge from bankruptcy as a reorganized company. If it survives, it will be dramatically downsized.

He said Hanjin's failure indicates a broader weakness. Ship lines are adding too many large vessels. These bring down the cost per container, but there isn't enough freight to fill the ships. The economics work only when the ships are full.

There are "too many ships chasing too little freight," Gross said.