More than 3,000 flying Sky Viper drones made the journey last week from a factory in China's Guangdong Province to the container port at Yantian Harbor. There, after clearing customs, they were set to be packed onto cargo ships, to cross the Pacific Ocean to Tacoma, Washington, and to be distributed by Skyrocket Toys, a Los Angeles-based designer and manufacturer that's No. 306 on the Inc. 5000 this year.
But the shipment never made it. Hanjin Shipping Co., the Korean shipping container company responsible for the longest leg of the journey, announced it was filing for bankruptcy protection.
Employees at Skyrocket's Hong Kong office heard the news first and put in a call to pull the shipment before it could reach Hanjin's boat. "We've been told it could take three to six weeks to get back," says Brooke Tingley, Skyrocket's vice president of operations. The products had to be returned to the factory to get new containers because the old ones belonged to Hanjin.
Skyrocket did manage to pull its products before they reached the ocean. However, many other U.S. companies weren't so lucky. This week, a handful of Hanjin container ships are stranded outside of ports along the West Coast. One, which was scheduled to dock in Seattle on Saturday, was still anchored off the coast of British Columbia Wednesday morning. And further south, three container ships idled en route to the Los Angeles-Long Beach port to avoid paying docking fees.
As of Monday, 79 Hanjin ships were denied access to ports worldwide, Reuters reports. All told, the $14.5 billion of merchandise belonging to 8,300 entities is said to be waylaid by the company's precarious financial situation. The standstill could even affect future product shipments--potentially putting holiday shopping inventories at risk and causing prices to rise for consumers, suggests Retail Industry Leaders Association president Sandy Kennedy. A U.S. bankruptcy hearing is set for Friday, but Kennedy told CNBC that ports are holding onto Hanjin cargo until payments are assured.
Skyrocket isn't worried about future shipping hiccups. It was able to move products around to cover the missed shipment. Tingley adds that there's been no indication that rebooking the freight with another company will be difficult. "We have a lot of different options," she says.
Oceanside, California-based JLab Audio was even more fortunate. The 11-year-old portable audio products company, which is No. 1,491 on the Inc. 5000 this year, relies heavily on freight brokers to make sure it has product in the right place at the right time. "Thank god we didn't have anything on those vessels," says CEO Win Cramer. "It's a hard hit for any business, but for a fast-growing business like JLab, it could have slowed momentum." On the contrary, he adds that it presented opportunities for JLab, since some of its competitors weren't as lucky.