Korean shipping partnership planned

News 5 Aug 2017 by WCN Editorial

Reliable reports emanating from South Korea suggest that the country’s container shipping companies are planning to create a national alliance

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It appears that a merger on Japanese ONE lines is not planned, but the idea is that all participants will co-operate to improve slot and ship utilisation levels, set up new cargo routes and make joint use of terminals (especially those outside South Korea).

An early 2018 start date is envisaged for the new operation, which has been named the Korea Shipping Partnership (KSP) shipping consortium.

It seems that Hyundai Merchant Marine, currently the 15th largest container shipping company in the world is behind the project, but with the full support from the Korea Shipowners' Association.

In all 14 shipping companies are involved, including recently established SM Line. However, the majority are carriers that are engaged in the short sea trades with Japan and on intra-Asia routes that extend as far west as South Asia/Middle East.

The full membership of KSP would comprise: CK Line, Dongjin Shipping, Don Woo Shipping, Dong Young Shipping, HMM, Hansung Line, Heueng-A Shipping, KMTC, Namsung Shipping, Pan Continental Shipping, Pan Ocean, Sinokor Shipping, SM Line and Tai Young Shipping.

The move is seen by executives close to the situation as helping improve the overall competitiveness of South Korea’s shipping sector while putting individual carrier’s on firmer financial footings. The bankruptcy of Hanjin Shipping Company last year sent shock waves through the industry and knocked confidence levels.

Several carriers are still losing money with HMM having lost US$652M in Q1 2017. This was considerably worse than the US$245M recorded in the corresponding period of 2016.