"Overcoming High Freight Rates and Logistics Bottlenecks"... KOTRA Launches Emergency Middle East Logistics Support Measures

Middle East Special Pavilion to Be Featured at “Export Boom-Up Korea” in October
Promoting Market Diversification Through Cross-Border Fulfillment Partnerships

As the prolonged conflict between the United States and Iran continues to disrupt export logistics networks across the Middle East and drive maritime freight rates up to 2.5 times higher than pre-war levels, the Korea Trade-Investment Promotion Agency (KOTRA) is stepping up support for affected companies, including a significant increase in the upper limit for logistics cost aid by 1.5 times.

According to a comprehensive survey conducted on September 14 by KOTRA's trade offices in 13 countries, of the 24 major ports across the six Persian Gulf Coastal Countries (GCC), nine outer ports beyond the strait are operating normally, while access restrictions remain in place for 15 inner ports.

Current Operations of 24 Major Ports in the Six GCC Countries along the Persian Gulf Coast. KOTRA

With the Shanghai Containerized Freight Index (SCFI) remaining high at 3,409.6 last month, KOTRA has secured overland routes to 12 nations—excluding Iran—by leveraging diversions around the Cape of Good Hope and connecting inland transport via outer ports in the Strait of Hormuz. In addition, KOTRA has established an air transport system to swiftly deliver urgent samples.

In response, KOTRA is reinforcing its one-stop support system to alleviate export companies’ logistics burdens and promote market diversification.

First, the maximum support limit for the 'Overseas Joint Logistics Center Project for Middle East-Affected Companies' will be raised by 1.5 times compared to the existing limit. For the Middle East, China, and Southeast Asia, KOTRA will expand logistics cost assistance from the current maximum of 16 million won to up to 24 million won, and for the United States and Japan, the support will increase to a maximum of 36 million won. In addition, KOTRA will set up a special Middle East pavilion at the “Export Boom-Up Korea” event, to be held at KINTEX from October 21 to 22, inviting local logistics buyers for one-on-one consultations and operating booths to address logistics challenges at every stage of the process.

Furthermore, to overcome losses from declining exports to the Middle East, KOTRA will newly launch a cross-border logistics support initiative in partnership with global e-commerce platforms. In collaboration with key platforms such as Shopee, Ohouse, and Musinsa, KOTRA will provide consulting on customs clearance, certification, and fulfillment. Applications for participation in the 'Shopee Southeast Asia Export Logistics Support Project,' which collaborates with Shopee’s fulfillment centers in five Southeast Asian countries (Vietnam, Thailand, the Philippines, Malaysia, and Singapore), will be accepted until September 20. KOTRA also plans to expand similar tailored projects for target markets such as Brazil, the United States, and Japan sequentially in the future.

Kyungseong Kang, President of KOTRA, stated, “Although we have overcome the worst due to the prolonged Middle East conflict, companies continue to face difficulties and their burdens are increasing. Through our trade offices operating in 13 Middle Eastern countries, we will make every effort to accurately assess the local situation and use this as a basis to help resolve issues affecting export logistics and other challenges for businesses. Furthermore, beyond restoring the Middle East market, we will do our utmost to ensure this situation becomes an opportunity for export companies to diversify their markets by actively exploring alternative destinations.”

This content was produced with the assistance of AI translation services.