Korea’s seven national flag carriers, including Korea Marine Transport Co. (KMTC), will launch ships for small and medium-sized enterprises on eight routes in Southeast Asia. The move is aimed at supporting mid-sized Korean exporters facing business difficulties due to soaring shipping freight rates.

The Korea International Trade Association (KITA) announced on Aug. 27 that it has partnered with KMTC, Janggeum Merchant Marine, Heung A Shipping, Namyang Shipping, Chun Kyung Shipping, Pan Ocean, Pan Continental Shipping, and Dongjin Shipping to provide transportation support on Southeast Asian routes through the end of the year. Forwarding company LX Pantos will also join the support project.

Through the project, the KITA will provide freight space of about 300 TEU container boxes every week on eight routes in five countries — Vietnam (Ho Chi Minh City and Haiphong), Thailand (Bangkok and Ramchabang), Malaysia (Port Klang), Singapore and India (Chennai and Nhava Sheva) at freight rates that are lower than market prices.

The reason for the KITA’s support is that ocean freight rates have been on a sharp rise this year due to the Red Sea Incident. In particular, container ship freight rates on Southeast Asian routes have increased nearly fivefold from $318 in January to $1,482 in August. This is a higher growth rate than those of North American West Coast routes and Northern Europe routes, which have doubled in the same period.

“We will lower the rates by applying lower rates applied to large companies with high creditworthiness to mid-sized exporters,” said an official from the KITA, explaining that the program is voluntary participation by shipping companies without any budgetary support. The KITA plans to recruit mid-sized companies to participate in the project through its website by Sept. 6. Our support will cover cargoes that can be loaded into dry containers such as general merchandise.

Source: Businesskorea