The South Korean government is once again intervening in container shipping. Shipping companies such as HMM are initiating extra sailings out of concern for export opportunities for the domestic industry.
Seoul wants to ensure that the country’s exporters have sufficient container shipping slots, as the capacity bottleneck that was observed during the Covid-19 pandemic, is repeating itself in the wake of the security crisis in the Red Sea.
The Ministry of Trade, Industry and Energy has announced that it has prepared support measures to prepare for the rising freight costs caused by the detour of liner shipping companies around the Cape of Good Hope. The country’s state-controlled flagship, container liner shipping company HMM, and local feeder carriers have been approached.
This month and in July, HMM will send three 9,000 TEU vessels on transpacific routes and to the Persian Gulf. Thereafter, through November, five 13,000 TEU vessels and two 1,800 TEU vessels will make additional ad hoc trips.
New congestion on the US coast?
To reduce freight costs for the domestic industry and support its cash flow, KRW 20.2bn (equivalent to around US$15m) in subsidies will also be disbursed, and additional support will be considered as needed in light of future cargo growth.
A temporary container depot will also be set up near the port of Busan, allowing the storage of up to 700 TEU at lower than standard prices.
The ministry apparently wants to keep an eye on market developments: “In order to closely monitor trends and respond quickly, we will continue to operate the export/import logistics emergency team and provide information through the Korea Trade-Investment Promotion Agency.”
South Korea is not the only one
The South Koreans are not the only ones planning unscheduled services. French shipping line CMA CGM is offering additional sailings between Asia, Northern Europe and the Mediterranean between the end of this month and early September. CMA CGM will deploy seven 7,000-TEU vessels, but the so-called “French Peak Service” sailings are aimed at French shippers who are struggling to get slots. But there’s also a potential challenge: industry service Linerlytica previously pointed out that there have been a number of additional sailings from Asia to the Pacific Southwest recently, which could increase congestion along the U.S. West Coast in the coming weeks. (PL)
