Legal Update: HANJIN BANKRUPTCY AND PORT CONGESTION ISSUES Health & Personal Care Logistics Conference Fall 2016

Hanjin Bankruptcy Hanjin bankruptcy filing on Aug. 31 in South Korea Global impact Intersections between bankruptcy, shipping, and contract laws US Federal Maritime Commission, and shipper and carrier counsel to comment on the evolving situation and industry impacts

Hanjin Bankruptcy FMC background and role complaints, enforcement, CDRS FMC guidance issued on Sept. 1 no jurisdiction over creditors’ claims monitoring to ensure fair business practices monitoring market impacts Industry concerns as expressed to FMC FMC future actions?

Hanjin Bankruptcy Issues What have been the impacts on Hanjin performance? stranded vessels vessel arrests port/terminal refusals to process Hanjin cargo What have been the impacts on cargo owners? delays and business interruption need for alternative transportation added costs contractual changes

Hanjin Bankruptcy Issues Ocean carrier alliances what is an ocean carrier alliance? are alliances regulated? Hanjin vessel sharing arrangements? what have been the impacts on alliance partners? What are the impacts on ports, terminals, others lien rights? refusals to service Hanjin vessels regulatory and commercial intersections

Hanjin Bankruptcy Issues Multiple bankruptcy proceedings have been filed, can you explain the different proceedings? How do the bankruptcy proceedings impact contractual performance? automatic stay no contract terminations Where can creditors’ claims be filed?

Hanjin Bankruptcy Issues How can cargo interests gain access to their cargo? What should cargo owners do to protect their interests? What will be the impact of Hanjin’s bankruptcy on market rates and capacity? Over-capacity has been an on-going problem, are more bankruptcies likely?

Port Congestion Issues How has the FMC engaged on the issue of port congestion (i.e. hearings; reports; supply chain teams)? What authority does the FMC have to address port congestion? There appear to be multiples factors that contribute to port congestion, i.e. larger vessels, labor, weather, etc.—how can carriers, ports and terminals assist in reducing port congestion?

Port Congestion Issues Are commercial solutions to port congestion likely? Does port congestion qualify as force majeure and excuse contractual performance? Should shippers/receivers pay demurrage if port delays are caused by congestion? Congestion due to the West Coast labor dispute disrupted supply chains, how can shippers/receivers protect themselves in the future? Has port congestion been improving or getting worse?