Three Additional Ships Deployed on Year-End US Routes... 7 Billion KRW Support for Medium-Term Freight Costs

'Export-Import Logistics Emergency Measures' Launched... Public-Private Comprehensive Response Center Activated
Three Additional Vessels (12,600 TEU) Deployed on Americas Routes by Year-End
7 Billion KRW Support for SME Freight Costs... 1,400 TEU Dedicated Volume for Small Shippers Added in January
Mid- to Long-Term Measures Also Pursued, Including Capacity Expansion and Container Box Procurement

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] Considering the deteriorating logistics environment for export-import companies due to the sharp rise in maritime freight rates, the government announced on the 2nd that it will deploy three additional vessels (12,600 TEU) on the trans-Pacific route by the end of the year.

To implement measures encompassing capacity expansion and support for cargo owners, the government will fully operate the 'Public-Private Export-Import Logistics Comprehensive Response Center.'

The Ministry of Trade, Industry and Energy, the Ministry of Oceans and Fisheries, and the Ministry of SMEs and Startups announced this 'Emergency Measures to Resolve Export-Import Logistics Difficulties.'

Recently, the freight rate per FEU (1 FEU = 12-meter container) on the U.S. West Coast surged from $1,572 in January to $3,880 on the 27th of last month, more than doubling. This has raised concerns that the export competitiveness of Korean companies may weaken.

From the 3rd, the 'Public-Private Joint Export-Import Logistics Comprehensive Response Center,' composed of government ministries including the Ministry of Trade, Industry and Energy, the Korea International Trade Association, the Korea Shipowners' Association, HMM, KOTRA, and the Small and Medium Business Corporation (SBC), will begin operations.

The center will carry out ▲monitoring export-import logistics trends such as shipping capacity and empty containers ▲supporting the implementation of government measures ▲recruiting shipping capacity for small and medium cargo owners and receiving and resolving logistics difficulties.

It will operate an Export-Import Logistics Difficulty Reception Center and a website to receive reports of unfair logistics practices or difficulties and provide a 'one-stop' service by forwarding them to relevant ministries.

From 9 a.m. on the 3rd, guidance and support services will be available at the center.

In addition to operating the center, practical additional support measures for companies will be prepared.

Three vessels (12,600 TEU) will be additionally deployed on the most severely affected trans-Pacific route. This is an extension of the support for a 3,880 TEU vessel deployed on the 30th of last month.

For Korean-flagged shipping companies, it is expected that 36,000 TEU of shipping capacity, a 40% increase from last month, can be supplied this month. Foreign-flagged shipping companies are also expected to deploy six additional temporary vessels calling at Korea this month.

Support for small and medium cargo owners, who have been hit hard by the sharp rise in maritime freight rates, will be strengthened. From this month until early next year, vouchers worth 7 billion KRW (to be used with logistics companies) will be provided to small and medium enterprises.

The allocation of 2,100 TEU of dedicated capacity for small and medium cargo owners, scheduled until the end of this year, will be extended until the end of next month. An additional 1,400 TEU of capacity will be allocated.

Furthermore, next year, logistics education and consulting, including maritime transportation, will be provided to 600 small and medium export companies.

For shipping companies that increase export volumes to the U.S. and Southeast Asia by 10% compared to the same month last year, incentives will be provided, including ▲extension of the port facility usage fee reduction period by up to 15% until June next year for six months ▲exemption of additional vessel entry fees.

This aims to encourage both Korean-flagged and foreign-flagged shipping companies to deploy additional vessels to Korea.

The Ministry of Oceans and Fisheries plans to promote mid- to long-term support measures such as expanding Korean-flagged shipping companies' capacity and container box supply to fundamentally solve export-import logistics problems.

In the first half of next year, eight new vessels (16,000 TEU) will be deployed, and by 2025, the ocean-going capacity of Korean-flagged shipping companies will be expanded to 1.2 million TEU from the current 770,000 TEU.

The Korea Ocean Business Corporation will expand its container box leasing business. Joint utilization plans for container boxes among Korean-flagged shipping companies will also be explored.

A government official said, "At this moment when the spark of export vitality is being rekindled, resolving logistics difficulties must be the top priority," adding, "We will actively resolve difficulties so that our export companies do not lose export momentum due to rising freight rates and lack of shipping capacity."

Source: Ministry of Trade, Industry and Energy