South Korean liner shipping companies – Sinokor Merchant Marine and Heung-A Shipping will begin integrating their container shipping service businesses next week.
With the combination of services, the duo intends to achieve economies of scale and improve competitiveness in a challenging market.
The integration process of the services will be followed by a full merger of the two companies in October 2019.
On April 11, 2019, the two parties signed an agreement on the integration of container shipping services, according to a statement issued by Korean Ministry of Oceans and Fisheries (MOF).
The deal is a follow-up to the Korea Shipping Partnership launched by South Korean container carriers back in 2017. The partnership is aimed at strengthening the country’s shipping industry following the collapse of Hanjin Shipping.
Sinokor and Heung-A are to integrate offices and routes in phases, with the Southeast Asia route to be merged first and China/Japan, Korea/Japan routes until December 2020, as explained by the ministry.
Once the process is finalized, the new shipping company will be the third largest in South Korea and the world’s 19th, with a capacity of nearly 90,000 TEU.