South Korea's Ministry of Oceans and Fisheries is grappling with challenges in utilizing Arctic shipping routes due to sanctions on Russia. The ministry plans a trial run of a 3,000-TEU container ship from Busan to Rotterdam in September, emphasizing the need for cooperation with Moscow. Acting Minister Kim Sung-bum stated that sanctions cannot be ignored, with specific countermeasures to be announced after talks in the first half of the year.
The Ministry of Oceans and Fisheries, recently relocated to Busan, is pushing to develop Arctic shipping routes but faces hurdles from international sanctions on Russia. The move to Busan occurred six months after President Lee Jae Myung proposed preparations for an era of Arctic navigation. The ministry aims to conduct a trial operation of a 3,000-TEU container ship from Busan to Rotterdam in the Netherlands around September, with consultations planned with Russia in the first half of the year.
Acting Oceans Minister Kim Sung-bum stated during a Monday press briefing, “Cooperation with Russia is absolutely crucial for using Arctic shipping routes... However, we cannot disregard the Western bloc’s sanctions on Russia, since Korea is also part of them.” He added that the ministry will announce specific countermeasures after arranging talks with Russia during the first half of this year.
While Arctic routes shorten voyages between Asia and Europe compared to the Suez Canal, higher insurance premiums increase overall costs, making them uneconomical for now. Kim noted, “Arctic routes may not be economically feasible until economies of scale are achieved after commercial operations begin. It is inevitable for us to provide incentives to companies participating in the test operations scheduled for this year.” The ministry plans to identify needed incentives for firms.
The ministry also indicated it will not intervene in IMM Private Equity’s sale of Hyundai LNG Shipping to an Indonesian firm, despite industry backlash. Kim said, “Although we believe that shipping firms transporting strategic items should remain under Korean ownership, it is difficult for us to intervene in private-sector decisions without holding shares.” Concerns are growing over potential foreign takeovers of SK Shipping and H-Line Shipping, both owned by Hahn & Company and recently relocated to Busan.
Post-relocation challenges persist, including a satellite office in Sejong for inter-ministerial meetings and encouragement of remote briefings to maintain productivity. The announcement of relocating affiliated organizations has been delayed following the resignation of former Minister Chun Jae-soo amid a bribery scandal. The site for the new headquarters remains undecided, with the ministry leasing temporary buildings; administrative procedures are set to conclude by year-end, followed by design next year.
