The fate of Korea’s shipping industry hangs in the balance as its two flagship companies are fighting a daunting uphill battle for survival. Policymakers and creditors pushing for corporate restructuring are strongly advised to focus on revitalizing the key industry.

On Monday, Hanjin Shipping, Korea’s largest shipping company, applied for a “voluntary agreement” with its creditors, seeking to obtain fresh financial support and restructure its mounting debt.

The company’s move was unexpected, as Hanjin Group, which controls the world’s eighth-largest container carrier, has endeavored for years to turn it around.

Hanjin is seeking a deal similar to the one that Hyundai Merchant Marine, Korea’s second-largest shipper, concluded with creditors last month.

Korea Development Bank and other creditors agreed to provide financial support to HMM on condition that the shipper’s controlling shareholder, Hyundai Group chairwoman Hyun Jeong-eun, gives up management rights and uses part of her personal wealth to normalize its operations.

Hyundai Group has also gone to great lengths to revive HMM, the world’s 15th-largest container carrier, but to no avail.

One key factor behind the two group’s failed turnaround efforts is the high charter fees their shipping affiliates have to pay to the foreign owners of their leased vessels.

Hanjin and HMM concluded charter contracts with the ship owners before the global financial crisis erupted in 2008. In recent years, charter fees have plunged as the volume of worldwide seaborne trade contracted amid a prolonged slowdown of the global economy. But the two container carriers could not rewrite their old contracts.

To make matters worse, global container shipping capacity has increased rapidly since the financial crisis, even as freight volume has been on the decline. The resulting overcapacity put pressure on freight rates, further eroding the bottom lines of the two Korean shippers.

Now, the fates of the two troubled companies are in the hands of their creditors. There is one thing that the creditors need to bear in mind: The restructuring of the two shippers would be meaningless if they are dropped from their global shipping alliances.

In the global container shipping industry, all the major carriers are currently allied into four large groups. Together, the four cartel-like alliances handle roughly 90 percent of global ocean freight.

Recently, a group of shippers from three different alliances have agreed to launch a new alliance to challenge the industry’s leading alliance, the 2M, which consists of Maersk and Mediterranean Shipping Co., the world’s two largest shipping lines.

As the existing four-alliance system is giving way to a new structure, Hanjin and HMM have to join a new alliance if they intend to remain in the container shipping business.

But to enter into a new alliance, they first need to be financially stable, as a financially troubled shipper will not be welcomed as an alliance partner.

If the two carriers fail to join a new group, they will lose the foundation needed to provide global services to their customers.

If they cannot provide worldwide services, it would be a huge loss not just for the Korean shipping industry but for the economy as a whole, given the country’s heavy reliance on seaborne transport for trade.

To improve their financial situation, the two carriers first have to lower their charter fees through negotiations with their ship owners. Then creditors need to restructure their debts to help them enter into a new alliance.