Implementation of Maritime Transport Support Project for Export of Martial Arts and SMEs

Securing Dedicated Vessels for Europe and Americas Routes to Support Exports

The Korea International Trade Association (KITA), in collaboration with the domestic shipping company HMM, announced that it will implement the 'Small and Medium-sized Enterprises (SMEs) Maritime Transport Support Project' starting from the 25th.

This project was established to resolve logistics disruptions faced by companies due to the Red Sea crisis and prolonged transit times through the Panama Canal. Its purpose is to reduce the burden of maritime logistics costs caused by logistics disruptions for export companies and to minimize export delays resulting from failure to ship cargo on time.

Currently, due to disruptions in the passage of the world's two major canals, global shipping companies are rerouting around the Cape of Good Hope, increasing freight costs for domestic export companies and causing delays in export cargo shipping schedules. According to the Korea Shipowners' Mutual Protection & Indemnity Association's Container Shipping Index (KCCI), as of last month, maritime freight rates on the Korea-Europe route have risen by 250.1% compared to October of last year.

According to a report by KITA's International Trade and Commerce Research Institute, the rerouting around the Cape of Good Hope adds 12 to 14 days to the voyage time on the European Union (EU) route compared to passing through the Suez Canal, resulting in an increase of 31 days for a round trip. This is causing delays in cargo shipment due to vessel circulation delays.

KITA, together with HMM, has secured weekly 1,000 TEU (1 TEU equals one 20-foot container) of dedicated shipping space for SMEs on Europe and Americas routes to support exporters facing difficulties during the export process. They have secured 500 TEU for the U.S. West Coast, 400 TEU for the U.S. East Coast, 50 TEU for Northern Europe, and 50 TEU for the Mediterranean routes.

Companies will enter into individual contracts based on this secured shipping space to ship their cargo. KITA plans to provide a total of 25,650 TEU of shipping space from the 25th through the end of the year to 95 companies selected in the first round of this project. They also plan to expand support by utilizing remaining TEU capacity depending on developments in the Middle East situation.

Kim Gohyun, Executive Director of KITA, said, "We hope that through this project, Korean companies struggling with logistics risks can continue stable exports," and added, "We hope that a long-term transport contract model between domestic shipping companies and export companies will be activated, contributing to reducing volatility in the domestic shipping market."

This content was produced with the assistance of AI translation services.