Korea's 14 container shipping lines to form national partnership
AMID a slow recovery in the sector, South Korea’s container shipping companies are banding together to present a united front in the face of an increasingly competitive global market and in light of Hanjin Shipping’s demise.
According to a statement from the Korea Shipowners Association, the nation’s 14 boxship owners are scheduled to ink a memorandum of understanding as they seek to form a national shipping consortium, named Korea Shipping Partnership.
The companies are Hyundai Merchant Marine, CK Line, Dongjin Shipping, Don Woo Shipping, Dong Young Shipping, Hansung Line, Heueng-A Shipping, KMTC, Namsung Shipping, Pan Continental Shipping, Pan Ocean, Sinokor Shipping, SM Line and Tai Young Shipping, according to an HMM official.
Through the agreement, the shipping lines intend to make themselves more competitive by sharing cargo capacity on vessels, rationalising trade routes, jointly forming and operating new routes, and implementing the joint utilisation of overseas terminals to optimise costs and improve the quality of services to clients.
The partnership plans to establish operational guidelines this year and expects to start operations in full by 2018.
In the meantime, the Korea Shipowners Association will be responsible for the administrative functions of the partnership.
The collaboration will be the first of its kind in terms of scale. There have been smaller partnerships such as Hyundai Merchant Marine's HMM plus K2.
The collaboration involves vessel sharing, slot exchange and slot purchases.
The Korean shipping lines' move follows the Japanese trio of MOL, NYK and K Line establishing a holding and operating entity named Ocean Network Express to improve their global competitiveness amid an unprecedented round of mergers and consolidations, on top of the formation of global alliances among major industry players.
The three Japanese lines are already members of The Alliance, along with Germany’s Hapag-Lloyd and Taiwan’s Yang Ming Marine.