A 14-member group of South Korean shipping companies has been formed to boost the liners’ competitiveness particularly in the Asian region in the wake of the Hanjin Shipping Co. bankruptcy.
The alliance, called the Korea Shipping Partnership (KSP), counts among its members Hyundai Merchant Marine Co. (HMM), Pan Ocean Co., Sinokor Merchant Marine, Korea Marine Transport, and Heung-A Shipping.
HMM, currently the world’s 15th largest container carrier, earlier this year agreed to establish a consortium with Sinokor Merchant Marine, which specializes in shipments between South Korea and China, and Heung-A Shipping, which focuses on shipments to and from Japan.
The KSP members reportedly plan to jointly operate overseas terminals and open more routes to Vietnam, Indonesia, and other Asian countries through restructuring efforts.
Under the alliance, KSP will be sharing cargo capacity under a vessel-sharing scheme. Operational guidelines will be announced by year-end, and operations are expected to begin in January next year, with administrative support from the Korea Shipowners’ Association.
The KSP partnership comes on the heels of the demise of debt-ridden Hanjin Shipping last year.
Hanjin Shipping, once the nation’s largest shipping liner and the world’s seventh largest, was placed under court receivership in September last year, as its creditors, led by the Korean Development Bank (KDB), rejected its self-rescue plan. Hanjin’s assets were eventually sold off to pay debtors.
Hanjin Shipping and other local shippers had been under financial strain due to slumping freight rates due to overcapacity and the global economic slowdown.
HMM had also experienced financial troubles but has managed to stay afloat with the help of state-run KDB. It also successfully negotiated a strategic cooperation with 2M Alliance members Maersk and MSC in December last year.
Photo: An-d –
