Photo: Ministry of Oceans and Fisheries
South Korea’s Ministry of Oceans and Fisheries (MOF) is struggling to attract local shipping companies to build ice-class container ships, despite dangling $8m of subsidies.
The idea was to build ice-class ships in a local shipyard in the hope of running regular liner services through the Northern Sea Route by 2030.
South Korea is keen to tap the NSR as an expedited shipping lane from South Korea to Europe, following the lead of China.
On 22 August, South Korean ferry operator Panstar Line executed a test voyage from Busan to Rotterdam, using the 2,758 teu Panstar Acro.
However, the market uncertainties – including the key factor of attracting sufficient cargo volumes – and the high construction price of ice-class ships are discouraging shipping companies from signing up.
The initial tender published by the MOF invited applications from 5 March to 26 June, but the lack of applicants made the ministry extend the deadline to 30 September.
Reportedly, one local shipping company held discussions with a shipyard in hope of tendering for the vessel construction. Eventually, no application was made, due to the expensive construction and challenges in securing cargoes.
Alphaliner noted in its report this week that only 737 teu was loaded on the Panstar Acro, failing to meet expectations of filling at least half the ship, despite Panstar Line holding extensive sales talks with shippers and 3PL companies.
“On Saturday, the Panstar Acro reached the UK port of Felixstowe, three weeks after leaving its start port of Busan. It marks the halfway point of its voyage.
“The ship will also return to South Korea via the Arctic route, with the round trip expected to take about 45 days,” the analyst said.
The South Korean government targets to have regular liner operations through the Arctic by 2030, although MOF is reportedly still reviewing the number of ships required for permanent operations during the NSR navigational season.
In another effort to reach out to ship owners, national shipping financial institution Korea Ocean Business Corporation held a briefing session last week, with officials saying they wanted to understand the difficulties perceived by shipping lines in operating NSR services.
KOBC officials said that if no applications are received this year, it would become harder to get more funding to attract more shipping lines in subsequent years.