[Courtesy of Hyundai Merchant Marine]
All 14 South Korean shippers, led by Hyundai Merchant Marine, agreed to forge a shipping alliance called "KSP" to avoid excessive competition among themselves and join forces in the face of strong competition with Chinese and Japanese rivals.
The shippers signed a memorandum of understanding Tuesday in a meeting attended by Oceans and Fisheries Minister Kim Young-choon who delivered a message calling for "preemptive and aggressive" investment as well as strategic management.
The Korea Shipping Partnership (KSP) involves all South Korean shippers who agreed to work out operational rules by the end of this year and refrain from competing with each other in Asia's crowded shipping routes, open joint routes, share cargo capacity and secure overseas terminals jointly.
It's the first time all South Korean shippers have formed a single club. The domestic shipping industry has been led by Hyundai Merchant since Hanjin Shipping, which used to be South Korea's largest container carrier, was formally liquidated in February to end its 40-year run.
South Korean shippers have been in trouble due to falling freight rates stemming from an oversupply of ships and a protracted slump in the global economy.
Hanjin, once the world's seventh-largest ocean carrier established in 1977, filed for court receivership last year that triggered chaos in its global cargo traffic. South Korea now struggles to rebuild its tattled shipping industry with a massive injection of state money. Hyundai Merchant controlled by creditors has absorbed Hanjin's assets to become a new flag carrier.
reporter
Lim Chang-won
cwlim34@ajunews.com
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