“K-Alliance” The Korean shipping lines alliance will be launched in 2021

South Korea’s five container shipping lines will cooperate in an alliance for services to Southeast Asia in the second quarter of 2021, after accepting a request from the Korean Ministry of Marine and Fisheries (MOF).

Expected to be called K-Alliance, the alliance cooperation agreement was signed on December 23, 2020, between MOF, HMM shipping line, SM Line, Pan Ocean shipping line, Sinokor shipping line and shipping company Heung-A.

Due to the rising wave of Covid-19 in Korea, the agreement was signed via video conferencing.

Southeast Asia is emerging as a global manufacturing region, especially in Vietnam, and this region has potential for commodity growth.

However, with 14 shipping lines in Korea, the competition is fierce.

The MOF estimates that the combined market share of Korean carriers on the Korea-Southeast Asia shipping route is 40%, out of a total capacity of 480,000 TEU, but this is at risk due to the major shipping lines in the world. are encroaching strongly. This is not the first time the government has sought to cool down what it sees as the country’s container shipping industry is overheating.

In 2017, the MOF designed the creation of the Korea Shipping Partnership (KSP), a retail alliance of all 14 Korean shipping lines. However, this effort is considered by many to be unsuccessful, due to the lack of determination by the shipping lines to avoid duplication of service.

However, the MOF does not require shipping lines to join the K-Alliance, which aims to save costs by deploying modern, environmentally friendly ships and sharing seaports and containers.

“This is the first attempt to form a service alliance comprising only Korean carriers to gain an advantage in size,”the MOF said. Other shipping lines are welcome to join at any time, in consultation with the existing member companies ”.

Source Phaata

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