S. Korea to introduce independent container freight index: customs office chief

Korea Customs Service"s commissioner Lim Jae-hyeon. [Photo by Kim Ho-young]

South Korea will introduce its own container freight index this year to better respond to changes in global supply and demand amid growing uncertainties from the worsening global supply chain disruptions, said Lim Jae-hyeon, commissioner of the Korea Customs Service.

“Securing accurate shipping freight rate information has become important for companies to set up business strategies in the face of the global supply chain crash,” Lim said in his first media interview with Maeil Business Newspaper since his inauguration in March.

“The government will introduce container freight statistics that reflect Korean freight conditions and give guidance to companies.”

Currently, Korean exporters and importers rely on the Shanghai Containerized Freight Index (SCFI) for data on freight rates. Shipping fares have continued soaring since the onset of Covid-19, spurring demand for more accurate rate information for Korea exporters in setting up business strategies because the SCFI does not properly reflect Korean conditions.

The customs office already completed internal development of the related statistics, using big data and AI and is readying to announce the first-ever Korean container freight rate data within this year after consultation with the Ministry of Maritime Affairs and Fisheries and Statistics Korea.

Such data would help exporters and importers to set better management plans through access to more accurate information on freight rates, Lim said.

The SCFI is a widely cited metric on market freight quotations based on a survey on logistics suppliers such as shipping companies departing Shanghai. The Korean statistics, meanwhile, will be produced based on reported fares on cargos departing Korea.

“We will announce freight rates from Korea to major exporting regions like the U.S., Europe, China, Japan, and Vietnam,” said Lim.

The data will be announced in monthly index this year and weekly index after next year.

Lim expected the Korean index will provide data on short-distance shipping fares, which will help small- and mid-size shippers better deal with changes in the market. Of container exports last year, 38 percent was short-distance shipments to countries in Asia including China, Japan, and Vietnam.

Lim also shared plans that the customs office will use big data in setting up regular statistics on direct overseas purchases, which will help up-and-coming companies wishing to enter the direct overseas purchase market with import statistics according to product, country, age, and gender.

His office is already utilizing artificial intelligence technology to inform importers possible tax payment errors in advance.

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