Korean shipping companies are reducing services and expanding capacity in response to falling freight rates, according to ChosunBiz.
Korean shipping companies are cutting services while expanding capacity to prepare for falling freight rates, reports Seoul's ChosunBiz.
Carriers are increasing blank sailings and reorganizing routes to cope with weak market conditions. Drewry reported that 75 blank sailings were announced globally this month, a rise of more than 50 percent from the previous year, with 35 already scheduled for January.
Alliances such as Premier, Gemini, and Ocean have reduced services on Asia-Europe routes. The Shanghai Containerized Freight Index stood at 1,656.32 on December 26, reflecting a 32.7 percent decrease from last year, despite a weekly gain.
Rates have declined as newbuild deliveries boost supply. Container throughput is expected to rise by 3.5 percent to 255 million TEU this year, while capacity will grow by 6.6 percent to 32.8 million TEU, widening the gap between demand and supply.
The Ocean Alliance plans to resume Suez Canal transits soon, which could push rates back to pre-Red Sea crisis levels. The Korea Maritime Institute projected that the SCFI could fall to around 1,100 by 2026.
Despite the challenging outlook, carriers are continuing to order new ships. Linerlytica noted that containership orders in 2025 reached a record high of 5.08 million TEU. HMM's capacity rose by 8.6 percent to 970,000 TEU in the third quarter, with more vessels expected to arrive in 2026.
Sinokor Merchant Marine has ordered four 13,000-TEU ships, while SM Line continues to expand its midsize capacity. Industry officials indicated that carriers' stronger financial positions compared to 2015-2016 suggest they are unlikely to engage in cutthroat competition.
HMM's debt ratio fell to 25 percent this year from 362 percent in 2016, while SM Line and Sinokor have also improved their balance sheets. Analysts believe that environmental regulations could help alleviate oversupply if older ships are scrapped.
