The government has set out to establish a 3 trillion won safety net to prevent a recurrence of the logistics crisis that caused supply shortages of electronic and automotive parts.

The Ministry of Oceans and Fisheries (Minister Cho Seung-hwan) prepared a plan to strengthen the competitiveness of the shipping industry in response to market fluctuations in order to support a "leap forward into a shipping industry resilient to crisis" amidst unstable market conditions, such as shipping freight rates that have been rapidly declining this year, in collaboration with relevant ministries, and reported it at the Emergency Economic Ministers' Meeting on the 4th.

The government will first establish a management safety net worth 3 trillion won for national shipping companies in preparation for a crisis.

A crisis response fund will be established with an initial size of 500 billion won and up to 1 trillion won depending on the demand from shipping companies to support the restructuring and mergers and acquisitions (M&A) of high-risk shipping companies and to respond quickly to various external environments such as environmental regulations.

In addition, investment and guarantee rates will be significantly reduced (to the scale of 250 billion won) for small and medium-sized shipping companies with insufficient financial capacity, and an emergency management stabilization fund (to the scale of 50 billion won) will be established to provide rapid support in the event of a liquidity crisis.

In addition, the Korea Ocean Business Corporation will fully launch a public shipownership program to secure up to 50 vessels by 2026 and lease them to domestic shipping companies (worth 1.7 trillion won).

In addition, to expand support capacity for domestic shipping companies during periods of low market conditions, the capital of the Korea Ocean Business Corporation will be continuously increased. Furthermore, efficiency improvements will be pursued by strengthening cooperation among shipping companies and adjusting overlapping routes through the K-Alliance, a voluntary cooperative body of small and medium-sized shipping companies operating on intra-Asia routes.

In addition, the government, in order to strengthen pre-detection capabilities for the occurrence of crises, We classify shipping companies by route and size, and establish a crisis response system for each shipping group by subdividing the impact of economic conditions and market fluctuations on each group.

Based on this impact analysis, the government plans to strengthen customized crisis support, including issuing early warnings when necessary and redesigning financial and policy support.

In addition, to replace the Shanghai Containerized Freight Index (SCFI), which indexes freight rates departing from Shanghai, and to provide accurate freight rate information tailored to Korea's actual conditions, a Korean-style container freight index has been developed and will be published weekly starting this month.

It is expected that the Korean freight index will enable our shipping and import/export companies to more accurately determine actual maritime freight rates, thereby facilitating fairer and more stable import/export logistics activities.

In addition, the government is also pursuing measures to secure the mid-to-long-term competitiveness of the shipping industry.

To establish an autonomous mutual growth system between shippers and cargo owners, we are pursuing institutional improvements, such as expanding the scope of the existing Excellent Shipper/Cargo Owner Certification System, and supporting the conclusion of long-term transportation contracts between domestic shipping companies and industry-specific cargo owner associations to secure a stable export foundation for small-scale cargo owners.

Through this, small and medium-sized shippers are expected to save up to 30% in logistics costs.

In addition, the proportion of transportation by domestic shipping companies for major strategic materials, such as liquefied natural gas (LNG), will be increased in consideration of economic feasibility and supply stability.

In addition, as environmental regulations on existing vessels are set to take effect next year and demand for new eco-friendly ships is expected to surge, incentives for private investment in ships will be expanded to diversify ship financing methods.

In addition, to stabilize the supply chains of domestic shipping companies and export firms, we will expand investment in terminals and joint logistics centers at major overseas hub ports, and to resolve the seafarer supply issues facing difficulties due to factors such as an aging population and the younger generation's reluctance to work long-term at sea. Plans are also prepared.

Finally, the government actively supports the transition to eco-friendly and digital shipping to respond to the rapidly changing global logistics environment driven by stricter environmental regulations and the digital revolution.

We will develop plans for the commercialization of future fuels in collaboration with the International Maritime Organization (IMO) and promote the development and commercialization of core technologies for eco-friendly vessels, specifically low-carbon and zero-carbon ships.

In addition, there are plans to lead the world in green shipping by sequentially converting 528 public and private vessels into eco-friendly ships and declaring the establishment of decarbonized shipping routes.

In addition, it will establish a legal framework to promote the development and commercialization of autonomous ships and support the digital transformation of the shipping industry, such as building a fully automated port at Gwangyang Port by 2026.

Through these measures to strengthen competitiveness, the government plans to support the leap toward a crisis-resilient shipping industry by securing 58 trillion won in shipping revenue, a national fleet of 120 million tons, and an ocean-going capacity of 1.3 million TEU by 2027.

Minister of Oceans and Fisheries Cho Seung-hwan stated, “The shipping industry has experienced a boom due to exceptionally high sea freight rates over the past three years, but external conditions are changing significantly, with rates falling by 67% this year alone.” He added, “While we cannot definitively label the current situation as a crisis, we plan to prepare for potential future crises through the formulation of preemptive policies and further support the shipping industry to firmly back our country’s import and export logistics.”