Korean shipping industry calls for financial support

Faced with falling shipping rates and a decline in trade, Korea's shipping industry urged the government Wednesday to extend financial support to help local shippers cope with an industry-wide slump.

"It is urgent to improve the vicious cycle of liquidity facing local shippers," said Lee Jong-chul, chairman of the Korea Shipowners' Association. "The shipping industry is very vulnerable to an economic cycle, which means shipping firms cannot survive without financial support."

Most South Korean shipping lines, including Hyundai Merchant Marine Co. and STX Pan Ocean Co., suffered losses in the second quarter of the year mainly due to lower shipping rates and falling trade volume alongside slumps in Europe and other major economies.

Only Hanjin Shipping Co., Korea's top container line, swung to the black in the second quarter from a year earlier, ending its six-quarter long losing-streak.

According to industry data, the Baltic Dry Index (BDI), a measure of shipping costs for commodities, stood at 669 points on Sept. 7, dropping 34 points, or 4.84 percent, from a week earlier.

From a month ago, the index sank 167 points or 19.98 percent, dipping below the 700-point again in seven months, according to the data.

The shipping industry also demanded that foreign rivals, including Japanese companies, be banned from bidding for shipping deals to be placed in October by five units of state-run Korea Electric Power Corp. (Yonhap)