Korea/Japan trade rate hikes considered

Korean shipping companies operating in Korea and Japan trade routes are considering hiking rates to save on operating costs and stay profitable.

The Korea Nearsea Freight Corporation (KNFC) revealed on July 2 that it will cut operating costs through regulating vessel oversupply and encouraging the use of unused cargo space from member companies. "We will try hard to hike the rates," said the KNFC.

Coming this year, container liners involved in Korea and Japan trade have paid close attention to the situation in order to have the best trade routes and to improve their profitability structures with the upcoming NB (Neutral Body) strict inspections from July 15.

Shipping companies have been surrounded by severe financial difficulties due to rates discounts flying under the flag of "logistic costs savings". "A system for shippers and shipping companies to live together with sound rates and services is now required," said a working level official at the KNFC.

"Amongst these difficult circumstances, we hope Korean small and medium sized shipping companies are successful with the help of the pool system and NB activities centered around the KNFC," said the KNFC official.

Bulk liners in Korea and Japan trades decided to introduce a Cargo Pooling System from July first. This was explained as a way to overcome economic depressions with pooling systems from oil tankers, refrigeration vessels and chemical tankers in the shipping industry.