- Concerns are rising over a potential global maritime traffic decline due to heightened protectionism and tariffs.
- South Korea’s shipping companies are seeking government support through tax incentives, subsidies, and enhanced crisis funds.
- Downward pressure on freight rates is expected to intensify in the global container shipping market next year.
South Korea’s shipping industry is facing uncertainty amid growing protectionism and tariff hikes anticipated in the coming year. National shipping companies are urging government action to address potential challenges, such as a decline in global maritime traffic and reduced freight rates. Discussions are underway to implement support measures that ensure stability within the sector, reports ChosunBIZ.
Impact of Protectionist Trade Policies
Concerns are mounting about a decline in maritime traffic as new trade policies, including universal tariffs and higher tariffs on specific imports, are anticipated.
Similar policies in the past have resulted in reduced global container traffic growth and falling freight rates.
Historical Trends in Freight Rates
The high-tariff environment during earlier protectionist trade policies led to a sharp decline in container traffic growth, with freight rates dropping significantly.
The Shanghai Container Freight Index (SCFI), a global freight benchmark, experienced prolonged lows during this period.
Shipping Industry’s Call for Support
South Korea’s major shipping companies have requested measures such as tax incentives, subsidies, and expanded crisis response funds to mitigate potential risks.
The Ministry of Oceans and Fisheries is reportedly considering these requests to prepare for a possible shipping recession.
Challenges Ahead
Experts predict structural oversupply in the container shipping market will exacerbate downward pressure on freight rates next year.
Addressing these challenges requires proactive measures to stabilize the industry and maintain competitiveness.
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Source: ChosunBIZ
