The South Korean government is intensifying efforts to support the country’s liner shipping industry and shippers amid an unprecedented spike in demand.
Speaking on 9 December, vice-minister for Oceans and Fisheries Park Jun-young, announced a KRW5 trillion (US$4.6 billion) investment in 33 ships by 2025, that will expand HMM’s capacity by 250,000TEU that will lift the mainline operators’ volumes to Hanjin Shipping’s pre-collapse levels, the government will provide.
HMM has taken delivery of a dozen 24,000TEU ships this year and in the first half of 2021, another eight 16,000TEU vessels will be delivered.
In addition, to further alleviate the Transpacific shipping capacity crunch, the ministry has directed HMM to provide at least two extra loader services, on top of the single monthly service that has been offered since August.
The government is HMM’s largest shareholder through state-backed policy lenders Korea Development Bank, Korea Ocean Business Corporation (KOBC) and Korea Credit Guarantee Fund.
With SM Line already offering monthly services from this month, there will be at least three extra loader services. MOF had, in October, stated that around 350TEU of the extra loader capacity had to be reserved for small and mid-sized shippers, with this benefit to last up to this month. However, Park said that this benefit will now be extended to the end of January 2021.
KOBC will also offer ships to local ship operators on an operating lease to ensure that shipping capacity can be secured if cargo volumes suddenly increase. Unlike finance leases, operating leases do not oblige lessors to purchase the vessels when the lease ends.
By 2025, KOBC plans to procure 50 ships that will be available for operating leases, with part of the funding to come from private investors.
Martina Li
Asia Correspondent
