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S. Korea logs record maritime transport deficit in 2017

S. Korea logs record maritime transport deficit in 2017

South Korea posted a record deficit in its maritime transport account in 2017 due to the fallout from a global industry slump and the restructuring of the domestic shipping sector, data showed this week.

The country’s maritime transport shortfall came to US$4.78 billion last year, compared with a deficit of $1.34 billion the previous year, according to the data from the Bank of Korea.

It was also the largest red ink since the central bank began to compile related data in 2006.

The maritime transport account had been in the black since 2006, with the surplus reaching as high as $7.08 billion in 2012.

The worsening deficit was ascribed to both domestic and overseas factors.

The global shipping industry has been stuck in a deep funk since 2015 due to falling freight rates stemming from an oversupply of ships and a protracted slump in the global economy.

Making matters worse, Hanjin Shipping Co., once the world’s seventh-largest shipper, went bankrupt in early 2017, dealing a fatal blow to the domestic shipping industry.

South Korea is also expected to register a deficit in the maritime transport account this year due to a sluggish industry recovery and a drop in local shippers’ market share.

According to industry data, the Baltic Dry Index (BDI), a measure of shipping costs for commodities, stood at 1,242 points in January, still far lower than a peak of 7,071 points in 2007.

Hyundai Merchant Marine held 5.8 percent of U.S.-Asian routes in June last year, compared with a combined 10.9 percent held by Hanjin Shipping and Hyundai Merchant Marine in June 2016.
Source: Yonhap