SOUTH Korea's logistics industry stakeholders have decried the Korea Fair Trade Commission's (KFTC) recent financial penalties on 12 country's liner operators, describing it as "a double blow amid tight shipping capacity".
At an industry seminar organised by Korea Shipowners' Association (KSA) on June 23, Korea International Trade Association official Kim Byung-yoo said: "I'm concerned that the fines will aggravate the logistical crisis and weaken the competitiveness of our export-oriented economy, especially in the current situation where exports are expected to increase significantly, ahead of Thanksgiving and Christmas."
On June 8, KFTC imposed fines totalling KRW500 billion (US$440 million) on 23 liner operators, including HMM, SM Line, Sinokor Merchant Marine, Pan Ocean and another eight South Korean companies, reports Container News
Following complaints from timber importers, KFTC's investigations found that 23 liner operators and the Committee of Shipowners for Asian Liner Service had come up with 122 freight-related agreements pertaining to the South Korea-Southeast Asia route.
Mr Kim noted: "KFTC's actions may lead to similar investigations by anti-trust authorities in Southeast Asian countries. Some improvements in procedures for joint actions are necessary. Perhaps we should take measures to stabilise freight rates and promote the signing of long-term shipping contracts."
KSA vice-chairman Kim Young-moo said that the tight capacity and the KFTC's fines are the biggest issues facing the container shipping industry in South Korea.
He added: "South Korean liner operators are already mobilising all available ships to fulfil ad hoc services. If they're fined and they have to sell their ships to raise the funds, this will make it more difficult for shippers."
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