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CH437 | Heir
🕑 Added 2025-09-20 14:48:43 +0000 UTCThe size of a shipping company was determined by its carrying capacity.
Simply put, it referred to the total weight of cargo a company’s ships could transport, and more specifically, the available space in vessels ready for immediate operation.
Hyunjin Shipping and Hyundai Shipping together held a capacity of roughly 1.1 million TEU.
Of that, the capacity of vessels borrowed from shipowners and that of vessels owned directly by the Taewoo Group were nearly equal in scale.
Because of this, threats from shipowners to reclaim their vessels no longer held weight. The shipowners had shifted to a negotiating stance at last.
“We’ll give you our final offer. We’ll reduce the discount rate on charter fees. A 50% discount on previous charter fees, plus an upfront payment of the five-year charter contract and overdue charter fees. This is the most favorable condition Taewoo Group can offer.”
“Even so, a 50% discount is far too excessive.”
For them to reject such terms—
It meant they had something to fall back on, likely discussions with shipping companies from neighboring countries.
If Korea’s shipping industry were to collapse, Japan, China, and others nearby could take its place.
If a Korean shipping company went bankrupt, conditions may have been presented where shipowners could receive compensation or profit in other ways.
“Let me repeat: even if you take back your ships, it will not cause any problems with operations. Furthermore, Taewoo Group has already placed orders with several shipyards. Within three years, at the latest, we will secure more than one million TEU in additional capacity.”
If the number of vessels increased, the ones most harmed would be the shipowners themselves.
In any market, when supply rises, prices inevitably fall. Over time, charter contracts would only become more difficult to secure.
There was another important message embedded in this.
Even if ships were reclaimed, Korea’s shipping industry would not collapse.
Meaning, if they reclaimed their vessels, they should not expect any compensation from foreign shipping companies.
The shipowners fell into deep thought.
Particularly, Jerry Wang, the representative, sat with his lips tightly sealed. One frustrated shipowner finally broke the silence with a low voice.
“Even if I sell my ships, will I still receive the overdue charter fees in a lump sum?”
“Of course. We will purchase the ships at the current market price, and as soon as the contract is signed, we will pay both the vessel price and the overdue charter fees in a lump sum. I promise that, at the latest, the payment will be deposited within one month.”
“Then I will sell my ships. I’d like to leave the shipping industry now, spend my days on a cruise, and quietly bring my life to a close.”
“If you sign the contract today, we’ll make full payment as soon as the ships are handed over.”
As with anything, the first step was the hardest.
Once one shipowner came forward, the others began to follow.
[I will also sell my ships. I’m tired of the daily ups and downs.]
[I’ll sign the additional five-year contract.]
[Can I sell part of my fleet and sign a five-year extension for the rest?]
Jerry Wang’s plan had unraveled.
He had hoped to unify the shipowners and wield their collective power, but instead, they fractured, each seeking their own way to survive.
“After today, renegotiation under these terms will no longer be possible. You’re free to reclaim your ships or pursue lawsuits over overdue charter fees if you wish.”
“I can’t beat you. Now you’re openly threatening us. Very well, Seaspan will also accept the conditions.”
Even Jerry Wang moved in the end.
The hesitant shipowners soon followed, all agreeing to the terms.
In the process, more than half of the 2.5 trillion won in charter fees was saved.
“I hope we can continue to maintain good relations going forward. Taewoo Group will always listen to the voices of our shipowners.”
“Ahem… that doesn’t quite fit the situation right now.”
They called it renegotiation, but in truth, it was nothing less than extortion for discounted charter fees.
Still, though Jerry Wang and the shipowners were visibly displeased, it wasn’t a deal where either side came out losing—so no one raised too much of a fuss.
“We’ve prepared a dinner for the shipowners. Let’s head to the hotel next to the Financial Tower right now. We’ll host you with top-class accommodations and a banquet. Also, many representatives from financial firms in the Financial Tower will attend tonight’s banquet.”
“You’re not forcing us to deposit today’s money with those financiers, are you?”
“Absolutely not. Think of this as offering an opportunity. The financial firms in the Financial Tower are known for being selective. No matter how much money you have, it’s hard to get into VIP-only investment products. But tonight at the banquet, that might be possible.”
There was no hidden motive.
It was a favor for the shipowners who agreed to a 50% discount on charter fees.
Of course, whether to accept the favor was entirely up to the shipowners, and in time they would realize that tonight’s banquet was a significant opportunity.
“Everyone, let’s go to the banquet hall. I plan to drink myself silly.”
“Mr. Jerry Wang, please stay behind for a moment. Shouldn’t we have a bit more to discuss?”
They sent the other shipowners off to the banquet hall, leaving only Jerry Wang of Seaspan in the meeting room.
The other shipowners had made the major decision to accept a 50% discount on charter fees.
But as for Seaspan, it had already signed a 50% reduction contract with me, so a deeper conversation was necessary.
“Ahem, do you have something more to say?”
“Shouldn’t we carry out a separate renegotiation with Seaspan? You don’t seriously intend to take only the lump-sum payment of charter fees and the additional contract terms without any further deal, do you?”
Seaspan had been excluded from the conditions reached in this negotiation.
If they were to receive compensation, wouldn’t Seaspan also need to offer something additional?
“Why are you painting me as the bad guy? The contract we concluded earlier applied only to Hyunjin Shipping. In this negotiation we added Hyundai Shipping’s charter fees as well, didn’t we?”
“That alone isn’t enough, though.”
“You’re not asking Seaspan to give an extra discount, are you? If I sign such a contract, I’ll be kicked out of my chairman’s seat!”
Jerry Wang spoke desperately. He didn’t sound like he was whining—he genuinely looked urgent.
“If a discount on the charter fees is impossible, then offer something else. Otherwise, the same thing as the last short-selling incident could repeat.”
“…How about information? I have high-level intel that hasn't been made public yet.”
Information could certainly be assigned a price.
Some intel could be worth trillions, but would the information coming from Jerry Wang be worth that much?
“Let’s hear it first and then put a price on it.”
“Signs are appearing that the shipping alliances are about to be reorganized. As you know, shipping alliances are tight cartels, so it’s extremely difficult to extract information about them.”
“That’s rather interesting. Keep talking.”
Information about the shipping alliances was indeed scarce.
Thanks to Jerry Wang’s long history in the shipping industry, he possessed several pieces of information that Taewoo Group did not.
“As you know, there are currently four shipping alliances.”
“I know that much: 2M, G6, 03, and CKYHE, which Hyunjin Shipping belongs to.”
“First, two members of CKYHE—the alliance Hyunjin joined—will withdraw soon. If that happens, CKYHE will collapse, and the shipping alliances are very likely to be completely reconfigured.”
A reorganization of the alliances.
I vaguely remembered such talk.
Excluding the largest alliance, 2M, the other three alliances would reshuffle and form two alliances.
“That’s fairly good intel. If you provide more detailed information, we’ll apply the same charter-fee discount to Seaspan as to the other shipowners.”
“I’m glad that helps. But as you know, the alliances are closed off, and information is very hard to come by.”
“Just send whatever you know.”
“The information I have right now... the Chinese government is leading a merger of two shipping companies. We expect that process will create fissures within the alliances.”
New shipping alliances.
The four alliances would shrink to three, consolidating previously scattered power.
If a company failed to belong to an alliance, it would suffer heavy losses—so every company would need to secure membership in one.
“For now, enjoy the banquet. Keep sending me any additional information you come across. If you provide valuable intel, I promise you a very fine gift.”
“What kind of gift are we talking about?”
“Taewoo Group tends to prepare gifts far beyond what the recipient can imagine. So, you can look forward to it.”
“I’ll mobilize all of my connections to gather information!”
Jerry Wang acted as if he had suddenly become a loyal vassal.
But it was nothing more than a transparent performance—at best, a one-time partnership for mutual benefit.
Of course, if he sent over useful information, he would be rewarded accordingly, but he was by no means trustworthy enough to warrant anything beyond that.
While the shipowners enjoyed their banquet, I called in Vice President Han to discuss the matter of the shipping alliances.
“There’s a strong chance the alliances will be restructured. Aside from 2M, the other three are expected to merge into two. The problem is, there’s no seat for Taewoo Shipping in that new setup.”
“Have you officially decided to name the two shipping companies under us Taewoo Shipping?”
“It’s just a provisional name. Since they belong to Taewoo Trading, calling them Taewoo Shipping makes sense. Still, running a shipping company without being part of an alliance won’t be easy.”
Vice President Han nodded.
Having studied the industry during the acquisition process, he understood well the importance of alliances.
“The shipping recession has dragged on. That only intensifies the competition for good routes. Excluding Korean shippers means the others stand to profit even more, doesn’t it?”
“So their intent is to deliberately shut out Korean companies and reap the benefits.”
It might not even be deliberate.
But enough time had passed since Taewoo Group had acquired the two companies. The fact that not one alliance had reached out showed they didn’t see much need for a Korean presence.
“Even if we bow our heads, it won’t be easy to get into an alliance.”
“Still, there’s a chance with 2M, the top alliance. Hyundai Shipping once reached out to 2M while trying to come up with its own survival plan, and they received a positive response.”
“You mean a temporary, strategic partnership? But does that still hold true today?”
It had been dressed up as a strategic partnership.
Not quite inclusion in the cartel, but at least a temporary hand extended in cooperation.
At this stage, however, there was no way of knowing if that still stood. After all, Hyundai Shipping had merged with Hyunjin to form Taewoo Shipping.
“One reason 2M was interested in Hyundai was to completely crush Hyunjin and secure Korea’s cargo within their network.”
“But now that Taewoo Group has taken over the shipping companies, that plan is in ruins.”
“Even so, 2M remains our best chance. The other alliances are expected to restructure around Chinese and Taiwanese carriers.”
“What about working with our old partners in CKYHE?”
“Among the former CKYHE members, none seem willing to stand with us now.”
We were essentially left out in the cold.
Of course, it wasn’t impossible to operate outside an alliance. Hyundai Shipping had done so before.
But with the global shipping recession, joining an alliance was practically a necessity. Which meant, in the end, the only way forward might be a political solution.
TL/n -
Major Global Shipping Alliances (as of 2025):
2M Alliance – Maersk & MSC (but MSC has begun moving away from 2M since 2023).
Ocean Alliance – CMA CGM, COSCO Shipping (including OOCL), Evergreen.
THE Alliance – Hapag-Lloyd, ONE (Ocean Network Express), Yang Ming, HMM.
