According to South Korean media reports, Hyundai Merchant Marine (HMM), South Korea’s largest shipping company, has decided to order 10 feeder container ships from Chinese shipyards. The reason for this is that Chinese shipyards, with their lower labor and raw material costs, have a significant price advantage that South Korean small and medium-sized shipyards cannot compete with.
HMM has reportedly made a preliminary decision to order 10 feeder container ships of two types from Chinese shipyards, with capacities of 1,900 TEU and 3,000 TEU respectively. The exact number of new ships remains undisclosed. Deliveries are scheduled for 2027, after which the ships will be deployed on specialized routes across Asia, the Middle East and Africa.
Although primarily operating routes between Asia and North America/Europe, HMM announced in July this year that it would introduce smaller container ships to diversify its business and develop new growth engines. This order for feeder container ships from a Chinese shipyard falls under that strategy.
Regarding the tender for these 10 small and medium-sized container ships, although HMM stated that it is considering factors such as ship price, delivery time, and secondhand ship prices and has not yet finalized the tender, Korean media reported that the participating Korean shipyards have been outbid by more competitive Chinese shipyards. Thanks to price advantages in labor and raw material costs, Chinese shipyards can build small and medium-sized container ships at a cost 20% lower than Korean ones.
The US is about to implement port fees for Chinese ships, but this will not apply to feeder container ships under 4,000 TEU. Therefore, it is expected that this series of container ships will be able to operate on US feeder routes (routes connecting major hub ports where large container ships call with smaller and medium-sized ports).
In response, South Korean industry insiders stated: “Beyond the three major shipbuilders—HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries—small and medium-sized shipyards in South Korea are facing a severe crisis. These smaller yards are equally vital to the nation’s shipbuilding ecosystem and urgently require government support alongside industry-led self-rescue efforts.”
According to data from the Korea Export-Import Bank’s Overseas Economic Research Institute, new orders for South Korea’s mid-sized shipyards plummeted 72% year-on-year in the first half of 2025, totaling just 150,000 compensated gross tonnages (CGT). Mid-sized shipbuilders including DH Shipbuilding, Dae Sun Shipbuilding, and HJ Shipbuilding & Construction saw no new orders at all.
At the same time, the total order volume of South Korean medium-sized shipyards plummeted to US$290 million, a year-on-year drop of 81.5%, and its share of the global new ship order volume fell to 0.8% – the first time it has fallen below 1% since records began in 2006. In terms of backlog orders, the order volume of South Korean medium-sized shipyards has shrunk by 20%, which is only enough to maintain construction volume for the next two years.
Meanwhile, the total order value for South Korea’s mid-sized shipyards plummeted to $290 million, marking an 81.5% year-on-year plunge. Their share of global new ship orders fell to 0.8%—the first time it has dipped below 1% since records began in 2006. Regarding existing orders, the order volume for South Korea’s mid-sized shipyards has shrunk by 20%, sufficient only to sustain construction for the next two years.
These data show that South Korea’s small and medium-sized shipbuilding industry is on the brink of collapse.