The South Korean government is said to be reviewing a plan to form an alliance of small- and mid-size local shipping companies in a move to reinstate the country’s position in the global shipping industry after the collapse of the national flag carrying container shipper Hanjin Shipping Co.
A senior government official who asked to be unnamed said on Wednesday that the government is currently considering the launch of an alliance comprising the country’s small- and mid-size container carriers under the name “Team Korea” that could fill the void left by Hanjin Shipping, once the nation’s largest and world’s seventh largest before its fallout.
Currently, Hyundai Merchant Marine Co. is the sole national flag carrying container shipper after Hanjin Shipping filed for court receivership in August. The official said the new network would be an expanded concept of the already-established alliance of local small- and mid-size shippers operating in Southeast Asia sea routes.
Before Hanjin Shipping collapsed, it and Hyundai Merchant Marine were operators of far-sea routes to the United States and Europe, while smaller players like Korea Marine Transport Co., Sinokor Merchant Marine Co. and Heung-A Shipping Co. mainly operated shorter, inshore routes.
The idea of creating an alliance among the country’s smaller players has recently gained traction after private maritime shipping associations including Korea Shipowners’ Association (KSA) and Korea Maritime Institute (KMI) proposed a joint operation among local shippers.
KSA Vice Chairman Kim Young-moo also said in an industry seminar on Wednesday that local operators should review the option of jointly operating intra-Asia routes to prevent any excessive competition among smaller players in the absence of the country’s leading container carrier. Concerns are rising that the country’s smaller shippers would not be able to survive two or three years later amid growing risk that 600,000 twenty-foot equivalent (TEU) capacity that Hanjin Shipping once commanded would be taken away by its foreign rivals, he added.
Industry sources expect that once small- and mid-size shippers form an alliance, they would work with Hanjin Shipping’s overseas workforce to expand their operations in both inshore and offshore routes.
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