Five South Korean Shipping Companies Form K-Alliance

Five South Korean Shipping Companies Form K-Alliance

The South Korean government has long wanted to revive the country's shipping industry and become a maritime power.
Five South Korean shipping companies, including HMM, Sinokor, SM Line, Pan Ocean and Heung-A Line, formed the "K-Alliance" on December 23 with the support of the South Korean government, aiming to enhance the competitiveness of shipping routes in Southeast Asia.

Under the agreement, K-Alliance will jointly provide airline services in Southeast Asia starting in the second quarter of 2021. This is also the first time in the history of South Korea maritime enterprise alliance.
It is reported that the container transport market from South Korea to and from Southeast Asia at present, the total transport capacity of South Korea shipping enterprises is about 190,000 TEU, market share is 40%, and because other countries shipping enterprises continue to expand the investment in the regional market, market share is gradually declining.

After the establishment of K-Alliance, different from the measures taken after the establishment of KSP to reduce the repeated investment of ships by Korean shipping enterprises in various routes, it is expected to achieve more significant cost saving effect and promote the smooth cooperation among shipping enterprises.

The future goal of K-Alliance is to establish strategic cooperative relationships with foreign shipping enterprises in The Asian region when necessary, and to build cooperative relationships with global shipping alliances such as The Alliance, so as to lead The Asian market.

The five Korean shipping companies participating in the signing of the agreement will then make detailed plans for the smooth operation of K-Alliance, discuss the best shipping fleet of each route, fleet expansion plan, etc., and officially launch the operation of K-Alliance in the second quarter of 2021 at the earliest.

However, South Korea's finance ministry has not forced liner operators to join the K-Alliance. "This is the first attempt to form a service alliance consisting only of Korean shipping companies to gain economies of scale," the finance ministry said. Other operators are welcome to join anytime, in consultation with existing member companies."