In the wake of the collapse of Hanjin Shipping Co. Ltd. (Hanjin), the Government of South Korea Monday announced that it will provide support to the country’s shipping companies in the form of KRW 6.5 trillion ($5.7 billion) to assist firms renew their fleets.
As Ship & Bunker reported in October, South Korea is also said to be mulling a plan that will bring together small and mid-size shippers into an alliance intended support the country’s position within the global container shipping market.
“As an export economy, South Korea is heavily dependent on the shipping industry,” said Greg Knowler, a maritime trade analyst, adding: “slowing consumer demand has put the brakes on its export cargo volume.”
“Hanjin Shipping, its largest carrier is bankrupt, debt-ridden HMM (Hyundai Merchant Marine) is owned by Korea Development Bank, and the shipyards have seen orders all but vanish this year as domestic and foreign orders have dried up.”
Pressure from the yards, carriers, ports and militant unions have made the government step in
Greg Knowler, Maritime Trade Analyst
The government’s new support initiative will be initiated with the establishment of a KRW 1 trillion ($871.7 million) state-backed vessel financing company.
“Pressure from the yards, carriers, ports and militant unions have made the government step in with today’s announcement,” said Knowler upon the news of the government’s support.
In January, Ship & Bunker reported that the South Korean government had announced a $1.2 billion investment fund intended to provide support to the country’s shipping industry.