South Korea government will consign 60 vessel orders and initiate a project to groom sea gateways as a global logistics hub to restore the country’s maritime reputation through state-led restructuring and subsidy program.
The Ministry of Oceans and Fisheries in its policy plan for this year released on Thursday said it will place orders for 60 new ocean-going vessels through Korea Ocean Business Corp., a state entity launched last year devoted to promoting shipping and shipbuilding industries with an aim to order a total of 200 ships by 2022. The state entity already placed orders for 57 vessels including container carriers and liquefied natural gas tankers last year.
To meet the growing demand for eco-friendly ships, the government will subsidize 10 percent of the ship coverage if a company upgrades old vessels with eco-friendly features.
The ministry will also seek ways to prevent cutthroat competition among local shippers and strengthen their global competitiveness. It will encourage mergers among the country’s eight major container carriers to bring down the number to six bigger names. Operators for the country’s main ports such as Incheon and Busan will be transformed into bigger entities through mergers.
To reclaim the shipping routes that the country lost following the collapse of Korea’s once leading container carrier Hanjin Shipping in 2016, the ministry will provide aids to shippers on opening new routes and expanding shipping capacity. K-Global Terminal Operators (K-GTO) will be formed in cooperation with shippers, port authorities, and Korea Ocean Business. K-GTO will work to secure operation rights of shipping terminals in Southeast Asian countries with high growth potentials such as Malaysia, Thailand, and Indonesia.