Deep down and looking for the light

Tightly tied in with the trading industry, the domestic shipping industry is causing more than a few to speculate on its hitting the worst crisis in 30 years.

The shipping industry, if any, in downturn, then it indicated export and import business also to get crippled. As the United States has been experiencing an economic down turn, Japan has been suffering from a prolonged economic recession, and the European Union doesn't look like it is doing much better, the world shipping industry is being battered along with them. Cargo drops in main trade routes, including the U.S. have become commonplace beginning this year, while rates restorations have met with failure, said a working level official in the industry.

Statistics in U.S. trades showed marked drops where immaterial increases had been present until last year. Major export items in Europe bound also posted decreases of 10%.

Especially, experts pointed out that Korea/Japan, Korea/China and Southeast Asian trades were hit the worst with cargoes in these areas not being able to satisfy liner profit projections; this is attributed to vessel oversupply and cutthroat competition. In Korea/Japan trades, the Korea Near Seas Council could avoid preempt these sorts of circumstances by preventing shipping liners from increasing their fleets and trade routes. This would lead to stabilized trades, promote profitability, and force stronger inter-shipping company bonds. Nowadays, liners are staking their future on cargo volume.

Korea/China trades also formed a neutral body for some ports in order to stabilize rates. However, efforts to make the trades more profitable have met with failure. Though cargoes increased by around 15% in the trade, vessel capacities jumped by about 40%, worsening the situation, said a source at a concerned shipping company.

The source predicted that shipping liners operating in Korea/China and Korea/Japan would streamline their operations during the aftermath of severe cargo collection competition when China joins the WTO and formally opens itself to the outside.

In face of a life and death struggle for existence amongst the nation's shipping companies, it may be time for the government and industry to cooperate in merging some shipping companies together in order to prepare for a much more competitive emerging international industry.