KOREAN LINES BROADEN FOCUS

KOREAN LINES BROADEN FOCUS

The Koreans are coming.

Forget about 1992 being the year that economic borders fall in European markets: 1992 is the year that the Korean shipping industry is scheduled to become deregulated.The Korean lines are already starting to make their moves. Late last month, Cho Yang Shipping Co. said it is extending its reach to North America by teaming up with with Senator Linie GmbH, Bremen, West Germany, and state- run Deutfracht Seereederei, Rostock, East Germany, to offer a weekly round- the-world service in both the east and westbound directions.

Other Korean lines may be branching out after deregulation, too. H.T. Hwang, general manager of Hanjin Shipping Co. in New York, said that some form of round-the-world service ispart of the line's long-term plan.

A third Korean carrier, Hyundai Merchant Marine Co., formed a new subsidiary in April to operate its double-stack trains and other inland services in North America. Analysts and competitors said Hyundai's move underscored the company's desire for a higher-profile intermodal presence.

Korean lines are expanding because they think they have to be able to offer shippers a global service to survive in the long term. Shippers want to be able to deal with one line for all their shipments all over the world, said Sung Soo Kim, maritime attache at the Korean Embassy in Washington, D.C. Deregulation can give the lines the flexibility to set up those global services, he said.

The Senator deal in one stroke will make Cho Yang a global carrier with a stake in all major world markets. The three lines will continue to own individually the vessels in the service, which will operate under the name Tricon- Services out of an operations center in Bremen, West Germany, according to Juergen Traub, president of Senator Linie (USA) Inc.

The service, scheduled to begin in January, will double the frequency Senator now offers. Senator officials have long felt that to be competitive, they had to match the weekly frequency offered by most major lines in the

trans-Atlantic and trans-Pacific trades.

Setting the Korean lines free of regulation could mean more competition in an already crowded world shipping market. But Cho Yang apparently has jumped the gun by moving to launch a major new service early next year, when Korean government approval is still required.

The Korea Maritime and Port Administration is "concerned with overcapacity with Korean vessels," noted Hanjin's Mr. Hwang. They are responsible for "making sure all (Korean) lines stay healthy," he said, and a round-the world service would be "tight competition" against other Korean lines.

When other industries have been deregulated in the United States, bankruptcies and major economic disruption and dislocation have been an unavoidable part of the process.

Whether the previously sheltered Korean lines will prosper in this intensely competitive international market may depend on the success of deals like the one Cho Yang made with Senator.