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Shipping industry steps up efforts to ease impact of Red Sea tensions
Minister of Oceans and Fisheries Kang Do-hyung, left, listens to a presentation on the recent situation in the Red Sea at the Government Complex in Sejong, Jan. 2. Courtesy of Ministry of Oceans and Fisheries
By Park Jae-hyuk
The Korean shipping industry and several government organizations are increasing their efforts to minimize the impact of tensions in the Red Sea. The situation escalated as Iran-backed Houthis from Yemen attacked civilian vessels, purportedly to support Hamas' conflict with Israel.
The Ministry of Oceans and Fisheries said Wednesday that HMM, Korea's largest container shipping company, decided to deploy four additional freighters starting in late January and early February to help Korean exporters avoid delays in delivering their products to Europe.
HMM made the decision because vessels bound for Europe had to divert and navigate around the Cape of Good Hope in South Africa instead of using the Suez Canal in the Red Sea. This has caused delays in export schedules for companies, as the alternative route takes an additional 15 days compared to the usual canal journey.
“We decided to rearrange operations for ships initially planned on different routes to ensure the stable exports of Korean companies,” an HMM official said.
The oceans ministry also asked Korean shipping firms to give priority to Korean exporters when loading goods.
“To mitigate the substantial impact on the automotive industry, we will let carmakers use container ships for exports and utilize extra outdoor storage yards,” the ministry said. “Additionally, we will establish a center to actively address and combat unfair freight rates .”
Members of the Yemeni Coast Guard affiliated with the Houthi rebels patrol the Red Sea, Jan. 4. AFP-Yonhap
On Thursday, Vice Oceans Minister Song Myeong-dal will preside over the first meeting of an emergency task force consisting of government and shipping industry officials. In response to major shipping companies like Maersk discontinuing the use of the Red Sea route last month, the government has convened multiple meetings to formulate measures to deal with the crisis.
Although the Ministry of Trade, Industry and Energy said on Jan. 4 that the rerouting has had a limited impact on the nation’s international trade volume, the oceans ministry emphasized the potential for similar disruptions in other parts of the Middle East.
Amid the lingering conflict in the Middle East, the Shanghai Containerized Freight Index reached 1896.65 on Friday, up 84 percent from the previous month. This is the first time since October 2022 that the most widely used index for sea freight rates surpassed 1,700.
Reacting to the crisis, U.S. Secretary of State Antony Blinken, while in Saudi Arabia on Monday (local time), conveyed that Houthi militants must be aware that there will be consequences for ongoing attacks on ships in the Red Sea. Despite this, the conflict is anticipated to persist, with reports indicating that the rebels made further attempts to attack multiple civilian ships on Tuesday.