South Korean shipping companies are enjoying high growth thanks to the South Korean government’s proactive support.
South Korean shipping companies are distinguishing themselves based on the South Korean government’s proactive introduction of environment-friendly policies.
The International Maritime Organization applied a fuel sulfur content limit of 0.5 percent instead of 3.5 percent to cross-border navigation at the beginning of this year. Then, the Korea Ocean Business Corp. introduced financial guarantee programs to assist non-large shipping companies with regard to expensive low sulfur oil. In the programs, they can be financially supported in installing environment-friendly equipment as an alternative to the oil. Before the programs, loans from financial institutions were unavailable in that case because they did not accept such equipment as collateral.
This year, global shipping companies significantly reduced their vessel operations after the outbreak of COVID-19 and international shipping charges soared as a result. South Korean companies such as HMM have been supplied with additional large container carriers and are benefiting from the high charges.
“A total of 2.1 trillion won in shipbuilding costs was required for the national flag carrier to procure 12 large container carriers,” the Ministry of Oceans and Fisheries explained, adding, “The investment would have been impossible without the guarantee from the state-run corporation.”
Source: Hellenic Shipping