KR chairman and CEO Lee Hyungchul: “My ultimate goal is to achieve a 50-50 balance between Korean-owned tonnage and international clients”
Our technical expertise is second to none. We are regulatory pioneers. But we are not as well-known as we should be in the West, says the chairman and chief executive of Korean Register Lee Hyungchul
Korean Register (KR) finds itself at a critical juncture. While the classification society is undertaking vital technical, technological and regulatory work, its client base remains 70% Korean. To improve its global market standing, KR must do more than demonstrate technical prowess; the society needs to broaden its international perspective and networks and compete for market share with leading Western classification societies that have long-standing relationships with Western vessel owners and operators. Chairman and chief executive Lee Hyungchul says a strategy is in place to address these challenges – and it is producing results.
“My ultimate goal is to achieve a 50-50 balance between Korean-owned tonnage and international clients,” says Mr Lee. “Korean shipping companies are not expanding their fleets at historic rates, preferring to maintain their core assets.” This dormant phase can be traced to the August 2016 collapse of Hanjin Shipping, once one of the world’s top 10 shipping companies and South Korea’s largest container line, and the significant restructuring of HMM (formerly Hyundai Merchant Marine) to enhance its focus on containerisation.
KR’s international client roster is growing and now includes Songa Ship Management, part of the Blystad Group, in Glasgow; Israeli owners such as Ray Shipping; and Navig8 Group headquartered in UK. “Also, Bernhard Schulte serves as an excellent reference for us and a relationship that has opened many doors in Germany,” says Mr Lee.
The society has established various international committees (European, Hellenic, China and southeast Asia) and recently opened offices in Finland, Antwerp and Santiago. It will shortly expand the network to Marseilles and Bucharest in Romania. The latter will serve Bulgaria where many ships are drydocked and surveyed, reducing the need for surveyors from Istanbul or Athens to travel there.
Key to the internationalisation strategy is establishing KR as a flexible and responsive partner, and this approach is taking root, says Mr Lee. “One of our clients faced challenges with handling costs under the new EU ETS regulations starting this year. Instead of an annual greenhouse gas emissions certificate, they needed specific certificates for each voyage route to calculate the EU ETS costs and charge them to shippers. This meant issuing hundreds of certificates, requiring significant processing time. To resolve this customer inconvenience, KR collaborated with an external software development company to create a customised system that collects real-time voyage data and generates reports for each voyage. This significantly reduced the time required for data entry and automated the process, resulting in a highly satisfied client.”
Technological innovation and digital transformation are also embedded in KR’s DNA, says Mr Lee, adding that the society has a strong focus on AI integration and is working with Microsoft Korea to integrate this functionality throughout the organisation.
Another case in point has been the decision to incorporate AI functionality into KR-CON, KR’s database of maritime regulations. This move aims to transform KR-CON from a simple regulation-finding tool to a more sophisticated, interactive system capable of answering complex queries and potentially assisting in design reviews.
“With the AI function, users will be able to engage in query-based conversations rather than relying solely on keyword searches to find information. For KR-registered vessels, the AI features will incorporate the vessel’s data, allowing for easier access to relevant information on IMO instruments.”
KR-CON was initially designed in 2000 to aid KR’s technical staff and field surveyors, as “it can be challenging for surveyors to determine which regulations apply to specific ships and published IMO documents often don’t clarify applicability to vessels built before certain dates, potentially leading to misapplication of regulations,” says Mr Lee.
The belief that regulations often do not reflect operational realities, prompted KR to launch a successful campaign to reverse an unreasonable share rating formula in the IMO guidelines related to the Carbon Intensity Indicator (CII) calculation. The issue centred on the fixed capacity value used in CII calculations for bulk carriers over 279,000 dwt and vehicle carriers over 57,700 gt. “We successfully proposed using actual capacity values instead of fixed ones for these calculations. KR’s proposed correction was agreed upon at the IMO MEPC 81 meeting held in March this year and was applied to the first attained CII rating in May. As a result, many of these vessels are expected to receive a higher CII rating, which can lead to economic advantages.”
As well as pioneering regulatory change, the society has sought to pioneer new rules on the use of alternative fuels, particularly ammonia. “Since 2014, we have also published guidance for fuel-cell systems on board ships, including associated fuel-reforming equipment. As part of a Korean government-funded R&D project, we are now developing a fuel-cell power pack for ship propulsion with our partners, integrating an ammonia reformer-fuel-cell system,” says Mr Lee.
He readily admits ammonia reformers and fuel-cell systems offer significant potential, but face several safety and efficiency challenges. “There is a pressing need for technologies that can miniaturise and lighten ammonia reformers while improving fuel-cell durability. Larger ships require more power, which means bigger reforming systems, but space for installation is limited. Additionally, fuel cells generally have shorter lifespans than internal combustion engines, complicating maintenance on ships. To tackle these issues, more work is needed on storage technologies and materials resistant to ammonia corrosion and hydrogen embrittlement. For stable operation, integrated control systems that connect the ammonia reformer and fuel cell are needed.”
KR is also collaborating with HD KSOE and STX Engine to develop a four-stroke ammonia engine. “We operate the TCC Green Engine Test & Certification Center in Gunsan, Korea, and have been working with domestic engine developers on ammonia engines since last year,” he says. “We have established safety facilities at the TCC, including an ammonia catching system, an after-treatment system, detectors and ventilation systems. The ammonia engine operates entirely remotely from a separate control room. We intend to use this experience developing ammonia engines to enhance class guidelines and support crew training.”
