- New Feeder Vessels Planned for South Korea-Japan route
- To start with slow and increase orders
- Total 20 new feeders orders at $400m
- KOBC owns 15 ships in different tonnage
Seoul’s Korea Ocean Business Corporation has financed 20 new feeder vessels for the South Korea-Japan route.
The delivery of ten 1,000 teu and ten 700 teu units are planned on long-term bareboat charters to support South Korean feeder operators, citing the rise in new building costs.
Estimated cost
The project costs up to $400m, although KOBC may start just four to eight vessels.
Jung Seong-jo, KOBC’s head of shipping finance, said: “We recently conducted a survey that showed 10 local feeder operators need 700-1,000 teu ships to maintain their dominance of the South Korea-Japan route.”
“Newbuilding prices are reaching a historical high, making it challenging to secure competitive charter rates. We will devise a funding plan to attract senior debt, while the KOBC will contribute 60% of the shipbuilding cost.”
South Korea-Japan route
The Korea Near-Sea Freight Conference representing the South Korean feeder operators active in the South Korea-Japan route had written to KOBC, requesting feeder ships on bareboat charters.
The trade body says that ships in the 1,000 teu and below tonnage are in short supply, affecting the members to secure tonnage.
Negotiations are in line with compatriot shipyards like Hyundai Mipo, HJ Shipbuilding, Dae Sun and Daehan to construct four to five feeder vessels planned for delivery in 2025.
Mr Jung said that, while KOBC would be the legal owner of the ships, the charter contracts would come with options to extend the hire, or to purchase the vessels.
