With SK Shipping and H-Line Shipping recently saying they will move their headquarters to Busan, attention is turning to what other shipping companies will do. The government is pushing a policy to transfer the headquarters of shipping companies such as HMM to Busan to make the city a maritime capital. The industry says it will not be easy to find additional companies to transfer, as many shipping companies still want a base in Seoul, close to their clients, and even the two companies that decided to move are likely to leave a significant number of their organizations in Seoul.
According to the shipping industry on the 11th, SK Shipping and H-Line Shipping announced on the 5th that they would transfer their headquarters to Busan and are proceeding with related procedures. The two companies are said to be moving forward with steps such as deciding on a registered address transfer through a shareholders meeting, selecting which organizations will transfer to Busan, reviewing work formats, and interviewing employees.
SK Shipping and H-Line Shipping said they would grow with Busan, where maritime industry functions are concentrated, as a starting point. The Ministry of Oceans and Fisheries also expected that the transfer of the two corporations would greatly help foster Busan as a maritime capital.
However, in the shipping industry there is a view that, aside from SK Shipping and H-Line Shipping, it will be hard to find additional companies that will move their headquarters to Busan.
According to the Korea Shipowners' Association (KSA), 94 out of 158 member shipping companies (60%) have their headquarters in Seoul. This includes large corporations such as HMM, Pan Ocean, Hyundai GLOVIS, Sinokor Merchant Marine, Heung-A Shipping, SM Line, Polaris Shipping, KSS LINE, and Korea Marine Transport Co. (KMTC).
Busan is home to the headquarters of 54 shipping companies (34%), including INTERGIS and DM Shipping, but most of the companies with headquarters there are relatively small.
Shipping companies base their headquarters in Seoul because most cargo owners, their clients, are located there. Many in the industry say a presence in Seoul is needed to build sales networks, communicate smoothly with customers, and make quick decisions. SK Shipping and H-Line Shipping are also said to be considering this and are not planning to move all departments to Busan.
Another reason cited for uncertainty about additional transfers is that several shipping companies already operate subsidiaries or organizations in Busan. HMM, for example, has its ship management subsidiary HMM Ocean Service in Busan, where about 500 people work. Pan Ocean and Sinokor Merchant Marine also have separate ship management companies in Busan.
By contrast, SK Shipping and H-Line Shipping do not have separate management companies and handle management with in-house organizations. As a result, their Busan headquarters organizations are relatively large. SK Shipping and H-Line Shipping have about 830 and 630 employees, respectively, and both companies already have more than 400 employees working in Busan. This differs from other lines, which have separate management companies and therefore have most employees working in Seoul.
An industry official said, "The transfer of SK Shipping and H-Line Shipping's headquarters to Busan will not have a major economic effect," adding, "These companies are also likely to leave key organizations such as sales and finance in Seoul, so it is unclear how many employees will actually move." Another industry official said, "Our circumstances differ from those of SK Shipping, where a significant number of headquarters staff are already in Busan," adding, "In a situation where the government is not offering clear incentives, many will not feel the need to transfer."