Decarbonizing Korean Shipping (1-2): A History of Korean Shipping

The second installment of the series traces how Korea built — and then partially lost — its maritime powerhouse status over seventy years.

Origins: Ships Salvaged from the Sea

Korean shipping began with vessels literally recovered from the ocean floor. At the end of the Pacific War (1944–45), US forces seeded Korea's coastal waters with tens of thousands of mines to sink Japanese merchant ships. Korea's first trade vessel under the national flag, the Aengdo (2,200 GRT), launched in February 1948, was one of those salvaged Japanese freighters.

State-Led Growth (1960s–70s)

The 1967 Shipping Promotion Act codified government support for fleet expansion. By 1979, Korea's merchant fleet had grown from 96 vessels (763,000 GT) in 1970 to 512 vessels (4.67 million GT) — a sixfold increase in nine years driven by export-led economic development.

Restructuring (1980s)

The second oil shock (1979) and chronic over-investment sent the industry into crisis. A 1982 operating deficit of KRW 102.4 billion forced the government to consolidate dozens of carriers into 20 companies under the 1984 Shipping Industry Rationalisation Plan.

The Hanjin Shipping Collapse

Hanjin Shipping, once ranked fifth in the world, went bankrupt in 2016. The causes: excessive charter contracts taken out in the boom, a race to operate ever-larger vessels, a brutal freight-rate price war, and management failure. Its collapse showed that even world-class carriers can disintegrate rapidly when external shocks meet structural fragility.

The forces that sank Hanjin — fleet gigantism and the chicken-game of freight rates — are still fully active today, now joined by a new challenge: the decarbonisation transition.

Korea's Current Standing

In 2024, Korean shipping service exports totalled USD 30.85 billion (approximately KRW 46 trillion) — large enough to rank fourth in Korea's export mix if counted alongside goods, ahead of shipbuilding.

Yet Korea's fleet growth has trailed peers badly. Taiwan grew its capacity 77.7% in a decade; Japan 32.8%; Korea just 2.2%. The average Korean vessel is six years older than its Japanese equivalent and seven years older than a Chinese one.