Faced with falling shipping rates and a decline in trade, South Korea's shipping industry has urged the government to extend financial support to help local shippers cope with an industry wide slump.
Mr Lee Jong Chul, chairman of the Korea Shipowners' Association, said that "it is urgent to improve the vicious cycle of liquidity facing local shippers. The shipping industry is very vulnerable to an economic cycle, which means shipping firms cannot survive without financial support."
Most South Korean shipping lines, including Hyundai Merchant Marine and STX Pan Ocean, suffered losses in the second quarter of the year mainly due to lower shipping rates and falling trade volume alongside slumps in Europe and other major economies.
Only Hanjin Shipping, South Korea's top container line, swung to the black in the second quarter from a year earlier, ending a six quarter losing streak.
According to industry data, the Baltic Dry Index, a measure of shipping costs for commodities, stood at 669 points on September 7 2012, dropping 34 points or 4.84 per cent from a week earlier.
A month ago, the index sank 167 points or 19.98 per cent, dipping below the 700 point mark for the second time in seven months.
The shipping industry has also demanded that foreign rivals, including Japanese companies, be banned from bidding for upcoming shipping deals in October 2012, including deals placed by five units of South Korea's state run Korea Electric Power Corporation.
Source: Yonhap News
