Logistics Crisis from Middle East... KITA Launches Maritime and Air Export Logistics Support

The Korea International Trade Association (KITA) announced that, due to a sharp increase in export logistics costs stemming from the aftermath of the Middle East war, it will launch the “Maritime and Air Export Logistics Support Program” in cooperation with the Ministry of Trade, Industry and Energy, the Ministry of Oceans and Fisheries, and domestic shipping and airline companies beginning on the 27th.

As global sea and air freight rates have surged by more than 40% due to logistics disruptions originating from the Middle East and rising oil prices, small and medium-sized enterprises (SMEs) and mid-sized companies, which have relatively weaker negotiating power, are facing increasing logistical challenges. In response, KITA announced on the 26th that it will collaborate with major logistics companies, including national shipping and airline companies, Samsung SDS, and Hyundai Glovis, to operate a total of three support tracks for export logistics, organized by mode of transport and shipment size.

As part of the discussions under the public-private “Export-Import Logistics Emergency Response Team,” which was launched in March to deal with logistics disruptions, KITA will implement the “National Shipping Companies’ Joint Maritime Transport Support Program” in cooperation with the Korea Shipping Association and eight national shipping companies. These companies will provide export SMEs and mid-sized companies with shipping space for major routes to India and Southeast Asia, offering up to 1,680 TEU (20-foot standard containers) per month at prices 10-20% lower than market rates for FCL (Full Container Load) shipments. The program will be piloted through June, after which KITA plans to expand participating companies and routes based on freight rate trends.

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KITA will also operate a year-round sea freight promotion for LCL (Less than Container Load) exporters in partnership with Samsung SDS. Samsung SDS will offer special monthly rates on more than 20 routes across the Americas, Europe, and Asia, and KITA member companies will be exempt from advance declaration fees if they ship more than twice.

With the unstable situation in the Middle East leading to the prolonged rerouting of Europe-bound vessels around the Cape of Good Hope, demand for air transport is rising, particularly for consumer goods such as high-end cosmetics where maintaining quality is critical. In response, KITA will launch the “KITA EXPRESS” air transport support program in partnership with national carrier Air Zeta and Hyundai Glovis. From May, companies exporting consumer goods such as cosmetics, apparel, and accessories via routes from Incheon to North America (Los Angeles) and Europe (Frankfurt, Vienna, London) will be able to access special rates.

Han Jaewan, Head of Logistics Services at KITA, stated, “With disruptions in the Strait of Hormuz driving up oil prices, freight rates on all global routes are also rising. We hope this program will provide an opportunity for our exporters, who are struggling with high logistics costs, to reduce their expenses.”

He added, “Once the war ends, there could be a sudden surge in demand for maritime exports to the Middle East that had been postponed, making it difficult for small exporters to secure shipping space. When the safe passage through the Strait of Hormuz is confirmed and national shipping companies resume operations, we will work with relevant ministries and agencies to secure dedicated shipping space for SMEs.”

Applications for the maritime and air export logistics support program can be submitted on the KITA website starting on the 27th, and services may be available as early as early May.

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