News:Asia

Limited success forecast for alliance of 14 Korean container lines: Alphaliner

An alliance of 14 Korean container lines will do little to help unless there is full scale consolidation says analyst Alphaliner.

The Korea Shipping Partnership brings together 14 Korean lines operating on the intra-Asia trade in a voluntary cooperation.

A Memorandum of Understanding (MoU) to form KSP was this week by HMM, KMTC, SM Line, Sinokor, Heung-A, Namsung Shipping, CK Line, Pan Continental Shipping, Dongjin Shipping, Pan Ocean, Dong Young Shipping, Doowoo Shipping, Taiyoung Shipping and Hansung Line.

With an aim of starting operations in early 2018 it is expected to initially focus on the Korea - Southeast Asia routes to Vietnam, Thailand and Indonesia. The alliance was announced by the Korea Shipowners Association, but none of the individual lines have issued a statement on the cooperation.

It will operate alongside the HMM + K2 alliance formed in January this year between HMM, Sinokor and Heung-A which Alphaliner noted had had limited success in the form of slot exchanges on the intra-Asian trades. “Generally speaking, Korean carriers remain fiercely competitive. This is also illustrated by KMTC and SM Line, which opted to stay out of the HMM+K2 arrangement and pursue their own growth plans,” Alphaliner said in its weekly newsletter.

It also sees limited success for the new alliance unless full-fledged consolidation is forthcoming.

“The Korean carriers’ disadvantages from (lack of) scale and from excessive competition in their common markets can only be overcome by full fledged consolidation - similarly to the recent and ongoing ef- forts of the major Chinese (COSCO and CSCL) and Japanese (NYK, MOL and K Line) container lines. Such a far-reaching move, however, appears to be remote in the Korean context,” the newsletter said.

Posted 09 August 2017

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Marcus Hand

Editor, Seatrade Maritime News