Korea’s No. 4 SinoKor Merchant Marine Co. and No. 5 Heung-A Shipping Co. will unite their container shipping services ahead of full merger in October to build economies of scale in the shipping sector against challenging global trade environment.
SinoKor Merchant Marine and Heung-A Shipping on Thursday signed a contract on merging their container shipping service businesses, according to the Ministry of Oceans and Fisheries and Korea Ocean Business Corp. Their agreement is a follow-up to the Korea Shipping Partnership launched in 2017 for a state campaign to save and rebuild maritime industry following the collapse of the country’s top and worlds’ seventh largest carrier Hanjin Shipping.
SinoKor Merchant Marine is the country’s fourth largest shipper with a capacity of 56,915 twenty-foot equivalent unit (TEU). Heung-A Shipping is No. 5 with 31,345 TEUs. Both shippers run their shipping service mainly in Asia.
Following the merger of their container shipping services, they will command a shipping capacity of 88,300 TEU, the third largest in Korea and No. 19 on a global scale.
The two companies will start consolidating container shipping services next Monday and form a single entity in October this year. For smooth transition, SinoKor Merchant Marine’s container business will be merged in phases – Southeast Asia route integrated first and add China/Japan routes by end of next year.
The shipping industry has been integrating around the world to stay competitive amid reduced global commerce. World’s largest container shipper Maersk in October last year merged three of its subsidiaries that specialize in short haul shipping to improve its service in China and neighboring regions.
By Choi Hee-seok and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]