Gwangju Export Companies Concerned Over Rising Shipping Rates and Oil Prices Due to US-Iran Conflict

Most Companies Still Preparing Responses
Support Needed to Alleviate Logistics Challenges and Maritime Shipping Costs

Exterior view of Gwangju Chamber of Commerce and Industry.

Companies in the Gwangju region have expressed concerns over rising maritime shipping rates and increased energy costs stemming from the conflict between the United States and Iran.

On March 6, the Gwangju Chamber of Commerce and Industry conducted an emergency survey of 37 export companies in the region that trade with the Middle East to assess the impact of the recent instability in the Middle East, which was triggered by military clashes between the United States, Israel, and Iran. According to the survey results, if the Middle East crisis becomes prolonged, the greatest concern for local companies is a rise in maritime shipping rates and disruptions or delays in logistics (64.9%). This was followed by ▲increased raw material and energy costs due to higher oil prices (54.1%) ▲delays or disruptions in export and import transactions, delivery schedules, or payment settlements (40.5%) ▲declines in sales and orders, reduced buyer confidence, and contraction of business (40.5%) ▲impact of sharp foreign exchange rate fluctuations (21.6%).

The Strait of Hormuz, which is at the center of the current crisis, is a major energy transportation chokepoint through which approximately 20% of the world's maritime crude oil shipments pass. About 70% of South Korea's crude oil imports come from the Middle East, making this strait a core energy corridor that has a direct impact on the domestic economy.

If this Middle East risk persists, there are concerns that rising energy prices and global logistics instability could simultaneously intensify, further increasing the management burden on domestic manufacturing and export companies, which are highly dependent on energy. In particular, local manufacturing and export companies may face greater challenges in sourcing raw materials and absorbing higher logistics costs at the same time, leading to growing uncertainty across the regional industrial sector.

Regarding response measures to a prolonged crisis, the most common answer among companies was ▲preparing countermeasures (48.6%). This was followed by ▲no particular response plan (29.7%) ▲suspending or postponing transactions until the situation stabilizes (24.3%) ▲diversifying buyers and suppliers (8.1%).

This indicates that a significant number of the surveyed companies have not yet established clear response strategies or have limited capacity to respond, raising concerns that the management burden on companies could increase further if the Middle East risk continues for an extended period.

Accordingly, companies suggested that the government provide practical policy support such as ▲alleviating logistics challenges and subsidizing maritime shipping costs (54.1%) ▲providing management stabilization funds and extending loan maturities (35.1%) ▲compensating export and import companies for damages (35.1%) ▲stabilizing energy (oil) prices and supporting crude oil stockpiling (29.7%) ▲providing rapid local information and risk alerts (29.7%).

Chae Hwaseok, Executive Vice President of the Gwangju Chamber of Commerce and Industry, stated, "Actual attacks on ships and traffic paralysis in the Strait of Hormuz, which accounts for more than 70% of our crude oil imports, could have a significant impact on the entire regional industry." He emphasized, "With the sharp rise in domestic gasoline prices and the real impact on the everyday economy becoming visible, it is essential for the government to actively respond with policies to stabilize crude oil supply and support logistics costs."

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