- Korean domestic shipping gets multibillion dollar support from the government.
- The package is aimed to support Korea’s growth as a major maritime nation.
- MoF offers subsidised rates for liner operators and shippers for a significant period.
- The government also plans to acquire stakes in container terminals on the US west coast.
The South Korean government has launched a major support package for the domestic container shipping industry, says an article published in The LoadStar.
Up to 20% freight subsidies
“The strategy for becoming a leading maritime nation” was announced by the Ministry of Oceans and Fisheries (MoF) on 29 June, as HMM finalised orders for a dozen 13,000 teu ships.
The MoF said shippers among Korea’s small and medium enterprises could get freight subsidies of up to 20%, if they signed long-term shipping contracts.
Win-win solution
Describing this as a win-win solution for liner operators and shippers, MOF said shippers would receive shipping services at subsidised rates for a significant period, with carriers assured of stable revenue.
Expansion plan
The government, through local port authorities, also wants to acquire stakes in container terminals on the US west coast to reduce loading fees for domestic carriers HMM and SM Line, and to establish logistics centres in European hub ports, such as Barcelona and Rotterdam.
Acknowledging rising newbuilding prices and the difficulty in sourcing chartered ships, state-backed shipping bank Korea Ocean Business Corporation (KOBC) plans to acquire up to 10 vessels this year, and, by 2025, a fleet of up to 50. These will be fixed to liner operators on operating leases.
Help to local liner operators
The MoF explained: “We’re helping local liner operators to secure tonnage and a low-cost structure to compete effectively with world-class operators. Operating leases can reduce the burden of vessel operations as, unlike standard bareboat charter hire purchase arrangements, the shipping company does not have to assume ownership of the ship, even after the contractual period is over.”
The government expects that, by 2030, Korean liner operators will have at least 1.5m teu in capacity, contributing at least $62m to GDP.
Did you Subscribe to our daily newsletter?
It’s Free! Click here to subscribe
Source: loadstar
