The liquidity of ocean-going shipping companies in Korea appears to have continuously got worse since global recession in 2008. Consequently their business environments are badly affected as shown in difficulty getting additional loan from financial institutions.

Focusing a discussion on the liquidity crisis in Korean shipping companies, Korea Maritime Institute(KMI) urged the government to come up with the solutions at the recent seminar on shipping market condition.

As of 2011, short-term debt of the shipping companies increased by 2.3 times over the previous year. Total 190 domestic shipping lines' short-term debt sharply rose from 1,497.8 billion in 2010 up to 3,382.9 billion Won in 2011.

As the world shipping market is in the midst of recession, Korean shipping companies are also going through serious liquidity problems due to deterioration of market condition, soaring oil price, burden of vessel cost and deficit accumulation etc.

The question of liquidity turns up in current ratio as well. The industry's current ratio in 2011 recorded 99.1% whereas more than 200% should be an ideal situation, which means that the shipping companies' liquidity capacity reaches just half the normal level.

More disturbingly, shipping companies have great difficulty raising funds to secure liquidity. The banking organs are more conservative to the shipping industry than in the past as some of the large shipping companies went into receivership and 52 closed down.

KMI suggested that Primary CBO(Collateralized Bond Obligations) system should be introduced to solve liquidity problem.