News / South Korean ferry operator Panstar ventures into 'cut-throat' liner sector

Honor Voyager. Photo: Panstar Group

South Korean ferry operator Panstar Group is moving into the boxship sector.

Known for its South Korea-Japan ferry services that also carry containers, Panstar is deploying a feeder vessel between the two countries.

The 1998-built 630 teu Honor Voyager, chartered from China-based Fonway Shipping, will launch Panstar’s liner service on 30 June when it departs Busan, calling at Kobe, Tokyo, Yokohama and Nagoya.

Panstar believes it has gained sufficient know-how in the cargo trades and plans to expand its portfolio to more Japanese, Chinese and South-east Asia ports next year.

The operator’s vice-chairman, Eom Sang-hoon, said yesterday that synergy could be realised by transporting high-value cargo that requires fast transportation on ro-ro passenger ships, and generic consumer goods on containerships.

The company started in 1990 as a forwarder, launched a Busan-Osaka ferry service in 2002 and expanded its shipping operations over the next two decades, starting an intermodal service involving sea between Busan and Osaka and rail to other Japanese cities.

Mr Eom admitted that competition was cut-throat on the South Korea-Japan route, but believed Panstar could break through. He said: “Entering new markets is always difficult. It’s important to establish a solid sales strategy, considering the long-term shipping know-how and sales experience. We have been exploring the container business for 10 years.

“When the market is good, cargo volumes and profits rise to a certain level, but can operators overcome the high costs in the long run? When the market is bad, demand is sluggish and freight rates are low, and operators doubt if they can even break even.

“However, if you think about it, when the market is difficult, charter costs fall, and that can be positive.”

Mr Eom added that Panstar would be open to running joint services with compatriot operators.

“Recently, foreign operators have also started South Korea-Japan services and that has affected South Korean operators’ revenue. I hope this could result in more cooperation between South Korean operators.”