8 April 2024 (Lloyd's List) - SOUTH Korea aims to increase the container shipping capacity controlled by the country’s carriers to 2m teu over the next six years, with a $4bn funding commitment to support fleet expansion and upgrades.
“By 2030, we will expand the fleet of national shipping companies to 2m teu and increase the proportion of green vessels to 60%,” president Yoon Suk Yeol said.
The fleet expansion plan will put the spotlight on HMM, South Korea’s only container shipping carrier, which accounts for the vast majority of the nation’s carrying capacity.
The world’s eighth-largest carrier, HMM boosts a live fleet of approximately 800,000 teu, with an additional 238,579 teu on order. South Korea’s second-largest line, SM Line, operates a fraction of that size with less than 70,000 teu, according to Alphaliner.
That means it could potentially require HMM to almost double its fleet size without factoring in the scrapping of retired tonnage.
The move follows an announcement by Ocean Network Express last month to scale up its carrying capacity to 3m teu over the same period.
Both companies are members of The Alliance, which faces the looming departure of another partner in the grouping, Germany’s Hapag-Lloyd.
President Yoon also pledged a green vessel funding of Won5.5trn ($4bn) to support national shipping companies in expanding their fleet and embracing environmentally friendly practices.
He made these remarks while attending the opening ceremony of South Korea’s first fully automated terminal at Busan port.
The seventh container terminal at Busan port, featuring automated cargo transfers from ships to containers, will increase efficiency by up to 20% compared with other ports and reduce the risk of safety-related accidents, according to a statement from South Korea’s presidential office.
The new terminal consists of three berths, each with a capacity of no less than 4,000 teu. The total berth area spans 837,000 square meters.
During the opening ceremony of the seventh terminal, Yoon also pledged to transform Busan port into a world-class intelligent port.
He further announced the government's commitment to establish a fund of Won500bn ($370m) to support the development of port equipment and technology.
To support the shipping industry, Yoon also promised to extend the tonnage taxation system, which was initially scheduled to expire this year.
Under the tonnage taxation system, shipping companies pay taxes based on the net tonnage of their fleet, rather than their profits, resulting in a lighter and more predictable tax burden.
