Freight Rate Hikes Benefit South Korean Shipping Firms
South Korea’s major shipping companies benefited in 1999 from freight rate hikes and lower foreign debt service costs resulting from the won’s surge against the dollar, analysts said. However, they said, expectations of rising shipping capacity following more deliveries of new ships would weigh down the growth of revenues for shipping firms this year.
Container shipping rates rose about six percent on average last year, which is in line with the country’s recovering exports, one analyst said. The won’s rise against the dollar helped cut costs of dollar-denominated debts of the country’s shipping companies, about 90 percent of whose debts are from overseas. The won/dollar rate fell to an average of 1,190 won in 1999 from about 1,400 in 1998.