Korea Trade-Investment Promotion Agency (KOTRA) activated an emergency response system after the war between the United States and Israel and Iran, and inquiries and difficulties received from corporations have exceeded 250 cases.
In particular, with port operations near the Strait of Hormuz largely suspended, logistics costs for corporations are surging. KOTRA has come forward to support corporations by presenting emergency voucher programs and alternative routes.
According to KOTRA on the 24th, from the 3rd to the 20th, inquiries and difficulties received by the "Middle East situation emergency response assistance desk" totaled 256 cases.
An analysis of the inquiries and difficulties received showed that "surging logistics costs and requests for support" accounted for 68 cases, or 28% of the total. The burden has greatly increased due to changes in shipping routes, return expense, storage fees resulting from shipping and transport delays, and rising marine insurance premiums.
In response, KOTRA is informing corporations that additional logistics costs incurred due to the Middle East situation can be supported through the "Middle East situation emergency voucher." Since the 11th, it has been recruiting corporations for support, with a total cap of 8 billion won. However, as an extra budget is under discussion, the number of supported corporations may increase later.
Other inquiries and difficulties received included: ▲ inquiries about whether exports are possible (36 cases, 15%) ▲ inquiries about logistics disruptions (30 cases, 12%) ▲ communication disruptions with buyers and contract cancellations (18 cases, 7%) ▲ disruptions in investment and construction orders (12 cases, 5%) ▲ employee safety and evacuation (4 cases, 2%) ▲ raw material supply chain difficulties (2 cases, 1%).
According to KOTRA's survey, of the 24 major ports in six Gulf Cooperation Council (GCC) countries along the Persian Gulf, only nine are operating normally. As operations at 15 ports are restricted or suspended, confusion related to logistics is growing.
Accordingly, KOTRA is presenting alternative ports and detour logistics routes. For example, Khor Fakkan Port in the United Arab Emirates (UAE) is about 120 km from the Strait of Hormuz, making it the closest and facilitating inland transport. Entering via Khor Fakkan Port and taking the Sharjah, Dubai, and Abu Dhabi highways allows entry into the GCC. However, this route has the drawback of high risk expense.
KOTRA has been checking the situation daily through the "Middle East situation emergency response task force (TF)" in connection with 13 Middle East trade offices immediately after the outbreak of war between the United States and Israel and Iran. Inquiries from corporations received by the assistance desk are resolved by linking them with the Middle East field, and difficulties are supported in cooperation with the government and related institutions.
Kang Kyung-sung, president of KOTRA, said, "We will use the 13 Middle East trade offices to identify and share on-the-ground conditions in real time, and, in line with our corporations' inquiries and difficulties, we will work with the government and related institutions to minimize the impact and do our best to support corporations."