With intra-Asia freight rates soaring five-fold over the first nine months of the year, South Korean feeder operators have agreed to set aside slots on intra-Asia routes for compatriot small and mid-size exporters.
Until year-end, the slots will be sold to the shippers at discounted rates, following a Korea International Trade Association request.
Every week, Korea Marine Transport Co (KMTC Line) will set aside 30 teu for Busan-Chennai shipments and 70 teu for Busan-Nhava Sheva shipments, while Sinokor Merchant Marine and its subsidiary, Heung-A Line, will reserve 20 teu each for Busan-Singapore, Busan-Port Klang, Busan-Bangkok and Busan-Laem Chabang shipments.
Namsung Shipping, CK Line, Pan Ocean, Pan-Continental and Dongjin Shipping will collectively reserve 60 teu for Busan-Ho Chi Minh City and Busan-Haiphong shipments. South Korean forwarder LX Pantos will help take bookings at lower fees.
Together this equates to a monthly allocation of 1,200 teu.
In January, shipping a container from South Korea to South-east Asia cost around $318 per 40ft, but this had surged to $1,482 in August.
The Red Sea crisis caused a shortage of tonnage on the Asia-Europe and transpacific routes, encouraging operators to divert ships from regional or short-haul lanes to these routes as freight rates rocketed to post-Covid highs.
As a result, while shipping costs to the Americas and Europe have recently shown some stability, shipping costs on South-east Asia routes are still strong.
KITA said eligible shippers would sign a shipping contract with the above feeder operators to secure dedicated space and preferential shipping rates.
The association’s vice-chairman, Lee In-ho, said: “I hope this project will help ease the logistics cost burden of our exporters that have been suffering from rising shipping rates.”
He continued: “In particular, we will do our best to actively support small and medium-sized export companies that have difficulty responding to supply chain instability, so that we can contribute to expanding South Korean exports.”