South Korea will implement a plan to order 200 vessels over three years to bolster the shipping industry – which has been struggling with recent diminished global demand and mounting costs.
The order will feature 140 bulk carriers and 60 container ships, including 20,000 TEU mega vessels and eight 14,000 TEU ships.
The orders are part of a restructuring plan for national shipping and shipbuilding industries from The Ministry of Oceans and Fisheries, following the industries hit from the bankruptcy of Hanjin Shipping Co. in 2016.
Oceans Minister Kim Young-choon stated: “Following the bankruptcy of Hanjin Shipping, sales of South Korea's shipping industry were cut by over 10 trillion won, and the tonnage of the deep sea containers has been cut in half.
“We have prepared a set of comprehensive measures to support the shipping and shipbuilding industries grappling with a protracted slump, intense competition and environmental regulations.”
Read the “Generational shifts: the growth of containerships” for an in-depth discussion on the progression of container ship capacity
South Korea’s largest shipping liner, Hyundai Merchant Marine Co., currently has a shipping capacity of 33,000 TEU – making it the 14th-largest liner in the world.
The ministry expects that the vessel orders will raise the company’s capacity to 1 million TEU by 2020.
The nation has also committed to developing eco-friendly and energy containers to be in line with the International Maritime Organizations sulphur cap – coming into enforcement on the 2020.
The ministry has also stated that it will set up an agency in July to encourage and support the order of new ships through investments.
The shipbuilding industry, long considered a central stake in the country’s economy, have been struggling with increased losses and the global industry downturn.
Along with the vessel purchase plans, the ministry has set out to consolidate many midsized shipyards through partnerships and mergers in order to increase their competitive edge, and has endeavoured to find a new owner for Daewoo Shipbuilding & Marine Engineering Co – which suffered heavy losses in April 2017, leading to a $2.6 billion bailout.