[Courtesy of Hyundai Merchant]
SEOUL -- In a move that reflects South Korea's growing presence in Russia's far eastern region, Hyundai Merchant Marine, a leading South Korean shipper, has agreed with Russia's largest intermodal transport operator, FESCO Transportation Group, to open two direct routes in May for container ships.
On May 11, Hyundai Merchant will start operating a 1,000-TEU container ship between South Korea's southern port of Busan and Vostochny, a container port at the eastern end of the Trans-Siberian Railway. FESCO would deploy a 1,200-TEU ship for the route between Busan and Vladivostok from May 14.
TEU is a unit of cargo capacity, based on the volume of a 20-foot-long (6.1 m) intermodal container, a standard-sized metal box which can be easily transferred between different modes of transportation, such as ships, trains and trucks.
Currently, Hyundai Merchant co-operates the China Russia North (CRN) Service with FESCO and CMA CGM S.A., a French container transportation and shipping company, that connects ports in China, South Korea and Russia. From May 14, the port rotation of CRN will change to Qingdao, Shanghai, Ningbo and Vladivostok.
Hyundai Merchant has tried to enhance its international competitiveness and profitability since Hanjin Shipping, which used to be South Korea's largest container carrier, terminated its 40-year-long business in February 2017, when South Korean shippers were in trouble due to falling freight rates and a protracted slump in the global economy.
However, Hyundai Merchant's operating loss soared 41.7 percent on-year to 576.5 billion won last year due to high oil prices and low freight rates that have hampered efforts to rebuild South Korea's tattled shipping industry with a massive injection of state money.
In return for aggressive self-rescue efforts, Korea Development Bank, a state policy bank, said on Tuesday that it would consider providing financial support to Hyundai Merchant to strengthen its investment in operating assets such as super container ships, container boxes, terminals and eco-friendly facilities.
"With this investment, we expect Hyundai Merchant to become a global shipping company with cost competitiveness and economies of scale," KDB said. Hyundai Merchant has led the Korea Shipping Partnership (KSP) formed by domestic shippers to refrain from competing with each other in Asia's crowded shipping routes.
reporter
Lim Chang-won
cwlim34@ajunews.com
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