FMC’s Doyle: SM Line forms from the ashes of Hanjin

Federal Maritime Commissioner William P. Doyle said SM Line plans on launching a transpacific service and eight intra-Asia services.    Samra Midas Group plans to have its new container shipping company SM Line begin operating a transpacific service in April, according to Federal Maritime Commissioner William P. Doyle.
   The service will operate between Shanghai and Ningbo in China, Busan in South Korea, and the Port of Long Beach.
   Samra Midas executives indicated the service will operate with five 6,500-TEU ships, Doyle said in a speech Monday to the National Retail Federation’s International Trade Advisory Committee and Strategic Supply Chain Council.
   In recent months, analysts have been speculating that all the major carrier consolidation would leave gaps for new entrants to come into the market to offer niche services because vessels are cheap due to persistent overcapacity.
   “SM Line is being formed from the ashes of the now bankrupt Hanjin Line,” Doyle said. SM Line “intends to operate eight intra-Asia services between China, Japan, Thailand, Vietnam, India, Pakistan, Indonesia and other countries. SM intends to operate approximately 11 vessels in the 1,000 to 2,500-TEU range (or smaller).”
   Another arm of SM Group – Korea Line Corp. – operates about 32 ships involved in the transport of LNG, coal, iron ore, nickel, oil products cars and trucks.
   The conglomerate is also involved in construction and engineering, banking services, real estate (it operates the largest shopping center and mall in Gunpo, or South Seoul), and manufacturing of diverse products such as chemicals, textiles, beverage containers, batteries, mirror and ceramic tiles, and aluminum parts.
   In other remarks, Doyle noted that retailers and other shippers “are concerned with ocean carrier alliances in the wake of Hanjin’s bankruptcy.”
   He told the retailers, “You should make every effort to secure the appropriate safeguards from the alliances. I urge shippers to work with carriers on ways to provide safeguards. This can be achieved any number of ways such as insurance contracts secured by an alliance, bonding or other financial instruments – but you should work now with your ocean carrier partners.
   “THE Alliance is the first alliance to formally explore options for providing safeguards,” he said. “Members of the Ocean Alliance are in the process of reviewing their safeguard offerings post Hanjin, and 2M recently announced that it has safeguards in place for its strategic operation agreement with HMM.”
   Doyle explained he has had direct discussions with principals of THE Alliance regarding safeguards they have drawn up in what he referred to as “framework language” in the discussion agreement they filed with the FMC.
   “Though the details have not been completely worked out, the intent in part is to set-up safeguards that could be used when an individual member liner fails in the network, (i.e., a carrier goes bankrupt),” he explained.
   In theory, he said, an instrument could be established that would create funds, which “could be used to pay operational expenses to bring ships into port and unload containers to ensure that cargo is not stranded on the water.”