19 South Korea Shipping Industry Statistics and Trends

In 1962, South Korea began its first 5-year economic development plan. It was a successful venture, so another 5-year plan was developed to build-up the heavy industry sector. That was when the South Korea shipping industry was born.

It was a dream of President Park Chung-hee at the time, to create a strong market through a strengthened industrial sector, based on shipping. At the time, many did not believe in such a dream. After all, the industry had a handful of outdated facilities, at best, to use for order taking. They were so primitive, in fact, that they could not meet international standards.

To begin the building process, Chung-hee personally guaranteed the financing for the industry. He borrowed the money, imported the technology, and then secured the industry’s first orders.

From a couple of isolated cathedrals, the industry would eventually create the world’s largest shipbuilding company in a span of less than 30 years.

Important South Korea Shipping Industry Statistics

#1. The South Korea shipping industry features the 18th-largest shipping flag in the world. About 7 million gross tons of shipping are registered in the country. (Lloyd’s Register Fairplay)

#2. In 2017, South Korean shipyards led the world in terms of new secured orders, with more than 1.5 million compensated gross tons representing a build of 26 vessels. (Global Security)

#3. Since 1968, the shipbuilding sector of South Korea has become one of its flagship industries. It has accounted for 10% of all Korean exports since then. (Global Security)

#4. In 2008, 70% of the world’s largest shipbuilders, based on order backlogs, were based in South Korea. In 2003, the country was #1 in the world for new orders, order backlogs, and shipbuilding tonnage. (Global Security)

#5. In April 2016, South Korean shipbuilders were unable to win a single order during a month for the first time in the industry’s history. (Global Security)

#6. In 2012, orders for shipbuilding in South Korea totaled 37.8 billion, second to China, which received $39.2 billion in new orders. (Global Security)

#7. Daewood had the world’s largest backlog in May 2016, with a total orderbook of 118 vessels, for an estimated 7.82 million CGT. (Global Security)

#8. Hyundai Heavy Industries is the world’s largest shipbuilder in terms of sales. In January 2018, the company announced projected sales of $7.5 billion, which was 20% lower than the year before, but significantly above industry expectations. (Financial Times)

#9. Hyundai’s major rivals, Daewood and Samsung, saw their shipbuilding divisions rise by 12% and 11% respectively because of a potential turnaround in the market. The won, South Korea’s currency, also gained 13% against the U.S. dollar in 2017, which helped to stabilize the industry’s financial picture. (Financial Times)

#10. In 2017, the order volume for the South Korea shipping industry was 6 million CGT, which was an increase from the 2 million CGT received in 2016. (Statista)

#11. Based on gross tonnage, South Korea was the world’s leader in shipbuilding for 2016. Shipyards completed 25.03 million in gross tonnage. China was second, at 22.35 million gross tonnage. Japan was third, with 13.3 million in gross tonnage. (Statista)

#12. 3 out of the 5 leading shipbuilding companies in the world in 2016 were located in South Korea, based on orderbook value figures. Hyundai led the way, with an orderbook of $24.42 billion. Daewoo was ranked second, with $19.9 billion, while Samsung was ranked 4th, at $10.47 billion. (Statista)

#13. The South Korean shipbuilding industry today contributes about 2% to the country’s overall GDP. They are also responsible for the direct employment of about 200,000 workers, many of them living in rural areas. (OECD)

#14. The total value of the exports from the shipping industry in South Korea represents about 8% of the country’s total exports, competing with electronics and automobiles for the top spot. (KOMEA)

#15. From 2010-2015, South Korea was responsible for 34% of world completions in the shipbuilding industry. China held the top spot, with 38%. (Korea Institute for Industrial Economics and Trade)

#16. South Korea was a global leader in shipyard capacity utilization in 2016, operating at 94%. In comparison, China operated at 68% capacity, while Japan operated at 83% capacity. (Korea Institute for Industrial Economics and Trade)

#17. The number of active yards in South Korea dropped from 1,130 in 2010 to 780 in 2015. Part of the reason for this is the fact that new-build prices in every major vessel category have dropped globally by 25% or more since 2009. (Korea Institute for Industrial Economics and Trade)

#18. South Korea is ranked as the top ship exporter in the world, even though China is ranked as the world’s top producer. That is because more than 30% of the shipbuilding production in China is intended for domestic use. (Korea Institute for Industrial Economics and Trade)

#19. South Korea is the top provider of offshore ships, producing 47% of the fulfilled orders in 2015. The industry is also responsible for 57% of the tankers that were produced in that year. The industry also ranked third for container bulkers, holding a 20% share of the export market. (Korea Institute for Industrial Economics and Trade)

South Korean Shipping Industry Trends and Analysis

The shipping industries are cyclical. In the 2000s, the South Korean industry could not be stopped. They were taking orders, growing rapidly, and earning billions in revenue. Beginning in 2010, that all started to change. Orders started to trickle away. Japan and China because extremely competitive. Europe began to take on more orders.

At the same time, the overall global orderbook has dropped rapidly as well. In 2016, the lowest number of new ship orders were placed around the world in more than 40 years. With a domestic order gap of 94% for the industry, along with a 71% drop in global orders being received, there are several pain points that the South Korean shipping industry must address.

Beginning in the Summer of 2016, the government approved a self-rescue plan worth a combined $8.8 billion for the three largest shipbuilding companies in South Korea. Working with their creditors, the goal is to help the companies regain a level of financial stability. Support programs are in place to provide another $640 million worth of support.

There will be tough times ahead for the South Korean shipbuilding industry. If it can survive these moments, then the cycles will change in time once again. Then it will thrive as it did in the 2000s, when everyone else was struggling.