HMM aims to secure more ocean trade by joining THE Alliance
FINANCIALLY troubled Hyundai Merchant Marine Co (HMM) is joining THE Alliance, a cooperating group of major container shipping lines that will give the South Korean flag carrier access to significant new business as it seeks to gain financial stability
FINANCIALLY troubled Hyundai Merchant Marine Co (HMM) is joining THE Alliance, a cooperating group of major container shipping lines that will give the South Korean flag carrier access to significant new business as it seeks to gain financial stability.
The move to join the group - consisting Germany's Hapag-Lloyd, Japan's Ocean Network Express and Taiwan's Yang Ming Marine Transport Corp - came after the rival 2M Alliance refused to make HMM a full member when its associate status ends in April next year.
HMM has been in a strategic partnership with Maersk's 2M alliance for several years. The move comes after an apparent rebuff of the money-losing Korean liner company's efforts to strike a similar deal with the 2M Alliance.
HMM will join THE Alliance as a full member and will become the fourth member of the vessel-sharing group, which will help the carrier cut costs by sharing ships, cargo volumes and port calls with its partners, The Wall Street Journal reports.
The agreement to join THE Alliance was finalised in Taipei on June 19. Subject to regulatory approval, the new contract between the four lines will officially start on April 1, 2020.
'HMM is a great fit for THE Alliance as they will provide a number of new and modern vessels, which will help us to deliver better quality and be more efficient - and it will help us also to further reduce our emissions,' said Rolf Habben Jansen, CEO of Hapag-Lloyd, in a joint statement.
The new tonnage that HMM will bring to the alliance is significant. With heavy support from the South Korean government, HMM has ordered twelve Korean-built 23,000 TEU vessels, which will be delivered in the second quarter of 2020. They will be among the largest container ships in the world at the time of delivery, and like other 'megamax' ULCVs, they are designed for the East Asia-Europe trade lanes. Additionally, eight 15,000 TEU newbuilds will join HMM's fleet in the second quarter of 2021.
'Being a full member of THE Alliance gives us a lot of pride. We are convinced that we will be successful and generate additional value for our customers, employees and shareholders with combined experience, strategic skills, competitive fleet and strong focus on our clients' needs,' said Jae-hoon Bae, president and CEO of HMM, in the joint statement.