- Holds an auto export logistics sector conference and announces support plan -

 The Ministry of Oceans and Fisheries (Minister CHO Seung-Hwan) will be hosting an industry conference with the mid-sized automobile sector and national automobile shipping firms at the Korea Shipowners’ Association on January 27th (Friday) at 14:00, chaired by Minister Cho. Renault Korea and SsangYong Motor, the automobile manufacturers currently faced with export logistics challenges, as well as Korea Ocean Business Corporation, Korea Automobile Manufacturers Association, Korea Shipowners’ Association, Hyundai Glovis, and EUKOR Car Carriers will be attending the meeting.

 With the recent spike in automobile exports from the Far East, the world is experiencing a major shortage in automobile carriers. As automobile carriers are of a special type of vessel that allow the transport of limited cargo types, only a handful of shipowners maintain a limited number of fleets. More specifically, due to hesitation surrounding new orders from global shipowners during the COVID-19 pandemic against the backdrop of expectations of reduced demand for automobile transport, the total number of automobile carriers worldwide has decreased to about 750 vessels from the pre-pandemic level of 770 vessels.

 However, as automobile exports spiked in contrast to market forecasts, led mainly by China, the global shortage in the supply of automobile carriers has aggravated, with the chartering cost of the carriers nearly tripling between pre-pandemic 2019 and the end of 2022. Renault Korea and SsangYong Motor, who are known to have a higher dependency on international shipping firms, are experiencing major challenges in securing freight space.

 In response, the Ministry of Oceans and Fisheries is hosting the industry conference to share its support plans to resolve the logistics challenges facing automobile exports and to listen to the opinions of key stakeholders in the industry. During the meeting, MOF plans to announce its plan to support the sector in resolving the export challenges caused by the shortage of global automobile carriers. MOF has drafted its support plan, based on key challenges identified by the industry and will be rolling out its plan in close collaboration with Korea Ocean Business Corporation and national shipping firms.

 First, based on the absolute shortage of the available automobile carriers in the market, the Ministry will provide the option to export cars using container vessels at competitive prices instead of automobile carriers by closely collaborating with national shipping firms. In particular, to resolve the logistics challenges in Far Eastern Asia – European routes, which are hardest hit by the current shortage of carriers, the Ministry will work mainly with shipping firms that operate European routes to designate and reallocate some of the freight space on container vessels headed to Europe for automobile exports. Moreover, in consideration of the automobile industry’s lack of familiarity in facilitating exports via container vessels, the Ministry plans to support this seamless alternative means of export by extending the in-port period for car containers.

 MOF will work closely with the Korea Shipowners’ Association and Korea Ocean Business Corporation to continuously supervise the implementation of the alternative means of export and to resolve additional challenges until the resolution of the automobile export crisis and form an emergency response task force to closely monitor and respond in a timely manner to new market developments.

 Moving forward, the Ministry will also support the mutual growth of both the ship and cargo owners. Regular ship and cargo owner meetings will be held to ensure seamless cargo space operations, while a collaborative system is to be built with the shipping sector to allow the designation of a maximum degree of free cargo space on national shipping firms to local firms. Moreover, the scope of coastal transportation allowed for automobile imports and exports will be expanded to Pohang Port, supporting the business of national shipping firms. The industry has also allowed the urgent transfer of automobiles to Pohang Port when the open storage yards are full, which is expected to assist with cargo operations.

 Lastly, MOF has decided to provide support to national shipping firms in order to secure additional automobile carriers by offering policy financing via Korea Ocean Business Corporation to resolve the fundamental issue of the shortage in logistics capacity. Korea Ocean Business Corporation will be engaging in discussions with the shipping sector to review the demand and economic feasibility of automobile carriers. Korea Ocean Business Corporation plans to review a wide range of support strategies, including equity investments and new Korean ship owner models. Vessels procured through these support programs will also be reviewed for allocating their cargo space to Korean mid-sized automobile cargo owners.

 The Ministry of Oceans and Fisheries (Minister CHO Seung-Hwan) will be hosting an industry conference with the mid-sized automobile sector and national automobile shipping firms at the Korea Shipowners’ Association on January 27th (Friday) at 14:00, chaired by Minister Cho. Renault Korea and SsangYong Motor, the automobile manufacturers currently faced with export logistics challenges, as well as Korea Ocean Business Corporation, Korea Automobile Manufacturers Association, Korea Shipowners’ Association, Hyundai Glovis, and EUKOR Car Carriers will be attending the meeting. With the recent spike in automobile exports from the Far East, the world is experiencing a major shortage in automobile carriers. As automobile carriers are of a special type of vessel that allow the transport of limited cargo types, only a handful of shipowners maintain a limited number of fleets. More specifically, due to hesitation surrounding new orders from global shipowners during the COVID-19 pandemic against the backdrop of expectations of reduced demand for automobile transport, the total number of automobile carriers worldwide has decreased to about 750 vessels from the pre-pandemic level of 770 vessels. However, as automobile exports spiked in contrast to market forecasts, led mainly by China, the global shortage in the supply of automobile carriers has aggravated, with the chartering cost of the carriers nearly tripling between pre-pandemic 2019 and the end of 2022. Renault Korea and SsangYong Motor, who are known to have a higher dependency on international shipping firms, are experiencing major challenges in securing freight space. In response, the Ministry of Oceans and Fisheries is hosting the industry conference to share its support plans to resolve the logistics challenges facing automobile exports and to listen to the opinions of key stakeholders in the industry. During the meeting, MOF plans to announce its plan to support the sector in resolving the export challenges caused by the shortage of global automobile carriers. MOF has drafted its support plan, based on key challenges identified by the industry and will be rolling out its plan in close collaboration with Korea Ocean Business Corporation and national shipping firms. First, based on the absolute shortage of the available automobile carriers in the market, the Ministry will provide the option to export cars using container vessels at competitive prices instead of automobile carriers by closely collaborating with national shipping firms. In particular, to resolve the logistics challenges in Far Eastern Asia – European routes, which are hardest hit by the current shortage of carriers, the Ministry will work mainly with shipping firms that operate European routes to designate and reallocate some of the freight space on container vessels headed to Europe for automobile exports. Moreover, in consideration of the automobile industry’s lack of familiarity in facilitating exports via container vessels, the Ministry plans to support this seamless alternative means of export by extending the in-port period for car containers. MOF will work closely with the Korea Shipowners’ Association and Korea Ocean Business Corporation to continuously supervise the implementation of the alternative means of export and to resolve additional challenges until the resolution of the automobile export crisis and form an emergency response task force to closely monitor and respond in a timely manner to new market developments. Moving forward, the Ministry will also support the mutual growth of both the ship and cargo owners. Regular ship and cargo owner meetings will be held to ensure seamless cargo space operations, while a collaborative system is to be built with the shipping sector to allow the designation of a maximum degree of free cargo space on national shipping firms to local firms. Moreover, the scope of coastal transportation allowed for automobile imports and exports will be expanded to Pohang Port, supporting the business of national shipping firms. The industry has also allowed the urgent transfer of automobiles to Pohang Port when the open storage yards are full, which is expected to assist with cargo operations. Lastly, MOF has decided to provide support to national shipping firms in order to secure additional automobile carriers by offering policy financing via Korea Ocean Business Corporation to resolve the fundamental issue of the shortage in logistics capacity. Korea Ocean Business Corporation will be engaging in discussions with the shipping sector to review the demand and economic feasibility of automobile carriers. Korea Ocean Business Corporation plans to review a wide range of support strategies, including equity investments and new Korean ship owner models. Vessels procured through these support programs will also be reviewed for allocating their cargo space to Korean mid-sized automobile cargo owners.