The industry ministry said Thursday that it will expand logistics support for exporters in an effort to minimize the impact of the escalating tensions in the Red Sea on the industry and the economy.

Tensions have risen further along the crucial Middle East route as Iranian-backed Houthi rebels based in Yemen are stepping up their strikes on ships in the Red Sea, and the United States and British militaries have launched strikes against them.

Carriers, accordingly, have been forced to suspend transit through the maritime route, which has led to longer shipping times and the increase in shipping costs, though South Korea has not suffered a major direct impact from the incident, according to South Korea’s Ministry of Trade, Industry and Energy.

In response, the South Korean government decided to raise the upper limit of logistics support for exporters from the current 20 million won (US$14,974) to 30 million won, and it will offer at least 40 percent more cargo space overseas for smaller exporters.

In case
the circumstances in the Red Sea worsen, the government will front-load 31 billion won of its export voucher budget earmarked for the second half of this year to enhance support and come up with various other measures to provide liquidity to affected firms.

“Uncertainties have grown and chances are high for the crisis to be prolonged. As it is difficult to predict how things will unfold, the government will implement risk management measures based on scenarios to prevent the incident from affecting our exports,” Trade Minister Cheong In-kyo said.

Source: Yonhap News Agency