الخميس، 8 سبتمبر 2016

Shipping woes may put a dent in Samsung’s sales during the holiday season

Samsung just can’t seem to catch a break. As the company braces for a potentially billion dollar hit due to the Galaxy Note 7 recall, it also faces the possibility of losing tens of millions of dollars in revenue by missing out on sales during the holiday season this year. Samsung has said that nearly $38 million worth of its products and parts are stranded onboard two cargo ships operated by Hanjin Shipping Co. Hanjin has filed for bankruptcy protection and Samsung has supported its move, the company says in a court filing that unless an order is passed that protects the shipping line against creditors its ships will not be able to dock.

Hanjin Shipping is the biggest container shipping line in South Korea and its collapse has sparked concerns that the ships will not be able to pay docking fees or handling charges at ports and this might give cause to its creditors to seize the cargo. This is why many ports in Asia, Europe and the United States have turned Hanjin’s ships away. Nearly 85 Hanjin ships are currently stranded near 50 ports across 26 countries. The ships need to dock so that Samsung can unload its cargo, Samsung says in its court filing that its losses will “continue to escalate so long as the cargo aboard these ships remains unloaded.”

Samsung’s visual display business has parts and finished goods worth $24.4 million in 304 containers destined for its factory in Mexico while its consumer electronics division has products like washing machines, refrigerators, dishwashers and microwave ovens in an additional 312 containers onboard Hanjin ships. If the ships don’t dock and the cargo isn’t unloaded immediately, Samsung will need to make alternative arrangements to transport the cargo by air in order to meet its contractual obligations. The company estimates that it will have to charter at least 16 planes by paying around $8.8 million to transport its goods stranded on these ships.

“All these costs and delays will be a loss not only to Samsung, but also to major retailers in the U.S. and, ultimately, to U.S. consumers,” Samsung mentions in the filing, adding that it’s important to Samsung’s and retailer’s interests that major disruptions in production are avoided particularly ahead of the lucrative shopping season. If this issue is not resolved soon, you might find it hard to come across a Samsung appliance on Black Friday.



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