Minimization of Aftermath
Deputy Prime Minister Yoo Il-ho stated on August 31 that he would do his utmost in order to minimize the repercussions of Hanjin Shipping’s application for receivership. Hanjin Shipping is the largest national flag carrier in the shipping industry of South Korea.
He mentioned that the effect of the receivership application on the domestic financial market and bank soundness is likely to be rather limited though, because difficulties related to the domestic shipping industry have already been reflected in the financial market during the course of the restructuring of the shipping sector and financial companies have already recognized most of the potential losses.
Still, he promised to set up a joint response system with relevant organizations in case of deterioration of market situations while strengthening the monitoring of debenture holders and so on and providing timely and customized financial assistance for firms working with Hanjin Shipping. “Significant short-term negative effects seem to be inevitable in the form of a reduced number of ships available for export, cargo transport delay, grounding of crew members, decline in transshipment traffic at domestic ports, etc.,” he explained, adding that he would deal with these obstacles by means of alternative vessel input, policy for getting such crew members back as soon as possible and infrastructure improvement for a higher level of competitiveness in transshipment.
“In addition, the South Korean government will run funds for the domestic shipping industry and come up with various industrial, financial and diplomatic measures so that the global logistics networks of the industry that forms the foundation of South Korea’s competitiveness as a leading exporting country can be shored up with continuity,” he went on to say, continuing, “Specific measures for the enhancement of the shipbuilding, shipping, steel and petrochemical sectors will be prepared by the end of this month through consulting with expert groups and organizations.”