South Korea has implemented a series of measures to mitigate the impact of increased freight rates due to escalating tensions in the Red Sea. The country's Ministry of Trade, Industry, and Energy (Motie) unveiled a three-stage support plan based on the Shanghai Container Freight Index.
The first stage involves raising the logistics support ceiling for exporters from the current 20 million won ($14,970) to 30 million won. Motie also plans to provide additional stocks in Europe and America, increasing the number of ships offered exclusively to small and medium-sized companies by over 40%.
South Korea has observed an increase in clean tanker freight rates in Asia due to the demand for urgent naphtha supply from the Middle East. Motie Minister Jeong In-kyo stated, "Given the complex interplay of interests among multiple countries, prolonged logistic disruptions in the Middle East are highly likely to continue with increasing uncertainty."
If freight rates continue to rise, the ministry will implement second-stage measures, including utilizing the 3.1 billion won previously allocated for export coupons. Considering long-term logistic disruptions, Motie will evaluate measures to expand support in consultation with relevant ministries.
Jeong added, "We plan to minimize the negative impact on the rising trend in exports by establishing appropriate risk management measures and addressing business challenges through close monitoring."
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