A South korean lawmaker has called on the country's banks to become more involved in the ship leasing business to help HMM build its fleet, reports London's Loadstar.
'To increase commercial banks' participation in the ship finance market and reduce the shipping companies' financial burden from newbuilding orders, it is necessary to quickly introduce the finance lease system in South Korea,' said Choi In-ho, from the ruling Democratic Party of Korea.
Mr Choi, a member of the National Assembly's Agriculture, Forestry, Livestock, Food, Marine and Fisheries Committee, noted that the gap between the country's flag carrier HMM (Hyundai Merchant Marine), and its seven larger competitors stood at just under 1.9 million TEU.
'HMM is having difficulties in ordering ships, due to the sluggish participation of commercial banks in the ship finance market after Hanjin Shipping collapsed in 2016. To be competitive, HMM needs to offer lower slot costs by having a larger fleet; otherwise, the company may face a crisis again,' he said.
Mr Choi noted that the participation rate of commercial banks in the domestic ship finance market had fallen from 22 per cent in 2014 to 7.3 per cent in 2018.
HMM, the eighth-largest liner operator, has a total capacity of 821,769 TEU, of which 545,134 TEU is owned. However, the seven larger liner operators have all placed substantial newbuilding orders or acquired second-hand tonnage as container shipping enters one of its most lucrative periods in history.
Mr Choi said HMM's seven larger rivals had an average capacity of 2.72 million TEU and had a combined orderbook for 3.28 million TEU.
SeaNews Turkey
'To increase commercial banks' participation in the ship finance market and reduce the shipping companies' financial burden from newbuilding orders, it is necessary to quickly introduce the finance lease system in South Korea,' said Choi In-ho, from the ruling Democratic Party of Korea.
Mr Choi, a member of the National Assembly's Agriculture, Forestry, Livestock, Food, Marine and Fisheries Committee, noted that the gap between the country's flag carrier HMM (Hyundai Merchant Marine), and its seven larger competitors stood at just under 1.9 million TEU.
'HMM is having difficulties in ordering ships, due to the sluggish participation of commercial banks in the ship finance market after Hanjin Shipping collapsed in 2016. To be competitive, HMM needs to offer lower slot costs by having a larger fleet; otherwise, the company may face a crisis again,' he said.
Mr Choi noted that the participation rate of commercial banks in the domestic ship finance market had fallen from 22 per cent in 2014 to 7.3 per cent in 2018.
HMM, the eighth-largest liner operator, has a total capacity of 821,769 TEU, of which 545,134 TEU is owned. However, the seven larger liner operators have all placed substantial newbuilding orders or acquired second-hand tonnage as container shipping enters one of its most lucrative periods in history.
Mr Choi said HMM's seven larger rivals had an average capacity of 2.72 million TEU and had a combined orderbook for 3.28 million TEU.
SeaNews Turkey
