The South Korean government is considering starting a container factory to address the ongoing container shortage.
[s2If is_user_logged_in()]Officials from the state-backed ship finance institution Korea Ocean Business Corporation (KOBC) reportedly met representatives of HMM and other local container carriers in the Korea Shipping Association’s (KSA) office on 5 March 2021.
During the meeting, solutions for ensuring a stable supply of containers were reportedly discussed, and the setting up of a container manufacturer was suggested.
It was proposed that South Korean ferry and resort operator Seaspovill take a 50% stake in the container manufacturer, HMM take a 35% stake and KSA, representing other local liner operators, having a 15% stake.
KOBC would provide funds to HMM and KSA by purchasing bonds from the latter parties.
There is an acute shortage of containers in Asia, as empty containers have been slow to return to the ports of origin from North America, as Transpacific rates hit a 10-year high in September.
The container crunch has also pushed up prices of newly built containers, which are mainly manufactured in China.
Industry sources said that year-on-year, unit prices of 20ft and 40ft containers have nearly doubled, to US$3,600 and US$6,400, respectively.
An HMM spokesperson told Container News, “We have recently been reviewing and discussing the idea regarding container manufacturing. However, we have yet to make any specific plans, and at the same time, we’re still standing at the very early stage on this issue.”
The South Korean government, like its US, Chinese and Taiwanese counterparts, has been intervening to minimise the impact of soaring freight rates and equipment shortages on shippers.
Seoul’s interest in container manufacturing mirrors the Indian government. Days ago, India’s Ministry of Ports, Shipping and Waterways established a committee to examine the viability of entering container manufacturing.
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Martina Li
Asia Correspondent
