Will Korea be the winner of the chicken game
in the Intra Asia Container Market through
the integration of medium container shipping companies?
What is the status of Intra Asia container market?
The Intra Asia container market is a shipping service market that operates only intra-Asian routes such as Korea, China, Japan, and Southeast Asia. Intra Asia container market is expected to be fierce due to aggressive sales by global shipping companies and orders for small- and medium-sized containers by existing shipping companies.
With the overlap of routes in Asia and the increase in fuel costs, major shipping companies operating in the market are seeking ways to survive. One way is to provide joint services between shipping companies.
Integration of Korean Medium Container Shipping Companies
It will also integrate the Sinokor Merchant Marine and Heung-A Shipping, which occupy the second and third positions in the intra Asia container market in Korea. Through this integration, the two shipping companies will achieve economies of scale and secure global competitiveness in the intra Asia container market.
From April 15, it will establish a practical operational cooperation system such as joint navigation and integration of computer systems. By 2020, all integration will be completed.
What kind of synergy is there?
Currently, Sinokor Merchant Marine is the 23rd largest shipping company in the world with a fleet of 56,915 TEU, while Heung-A Shipping is 37th in the world with a fleet of 31,135 TEU. However, the integration of the two shipping companies will increase the total fleet to 80,860 TEU, creating the world’s 19th medium-sized container carrier. Accordingly, Korean shipbuilders are expected to increase to four companies from the existing three companies (Hyundai Merchant Marine, KMTC, and SM Line), which are among the top 20 in terms of fleet capacity.