11.6 C
Hamburg
Friday, October 23, 2020
Home News KITA proposals seek Seoul action on soaring Pacific rates

KITA proposals seek Seoul action on soaring Pacific rates

The Korea International Trade Association (KITA) has submitted a proposal to the Ministry of Trade, Industry and Energy and the Ministry of Oceans and Fisheries, urging them to take measures to address rising Transpacific freight rates.

KITA, which represents South Korean manufacturers and exporters, said solutions are needed to stabilise logistics costs and prevent a decline in the competitiveness of local industries.

The association’s proposal, sent on 18 September, comes just as freight rates from Asia to the US West Coast have hit highs of US$3,867/FEU, while US East Coast rates increased to US$4,364, compared to a week ago.

Both KITA and China’s Ministry of Transport have expressed concern at the rising shipping costs.

The Shanghai Containerised Freight Index went up 8.5% year-on-year in the first quarter of 2020, 16.3% in the second quarter and 37.4% between July and August, meaning that the upward trend has persisted throughout the year.

KITA stated from July to August, the rates from Shanghai to North America increased 72.6% from the same period last year, and the rates for South Korea-Japan, East Asia-Southeast Asia and Asia-North Europe routes, are also rising. The market share of South Korea's exports by region is estimated to be 24% in Southeast Asia, 10.4% in the European Union, and 6.4% in Japan.

KITA also noted that carriers blanking sailings in response to the Covid-19 pandemic has reduced shipping capacity, placing upward pressure on freight rates.

The association stressed that some major carriers have also signed long-term contracts with Chinese shippers and the agreed rates come at a premium.

KITA suggested that the government manages and supervises liner operators’ “excessive fares” and allocates sufficient shipping capacity for South Korean shippers.

KITA’s head of logistics, Kim Kyung-yong, said, “As of August this year, sea transportation accounted for 98.9% of exports from South Korea. We really need shipping companies to co-operate for the well-being of shippers.”

Martina Li
Asia Correspondent

- Advertisment -Port Montreal advertisment
- Advertisment - LR Sustainability Decarbonisation Digital Adverts

Latest Posts

Information sharing communities and digital supply chain visibility

Supply chain operations can be complex. Especially where multi-modal transport is necessary, and where dynamic decision making is required for the routing of goods...

Red Hook Terminals selects Octopi’s TOS

Red Hook Terminals has signed a subscription agreement for the Octopi cloud -based terminal operating system (TOS) by Navis at its Newark, New Jersey...

Hapag-Lloyd to upgrade its EMX service

Hapag-Lloyd has announced it will restructure the East – Mediterranean Express (EMX) service in order to further enhance its North Europe-Mediterranean product. As of early...

RCL expands China-Indian subcontinent links

Thai feeder operator Regional Container Lines is enhancing its connections between China and the Indian subcontinent, through slot purchases on CMA CGM's North China-India...

Port of Le Havre turns green with pollution control deals

Port of Le Havre has joined the "Getting to Zero" coalition which aims to reduce greenhouse gas (GHG) emissions from shipping by at least...

We have introduced a voluntary registration system which will help us to understand our customers better and offer them an improved service.

From 1 January, 2021 registration will be required but news content access will remain free of charge.