HMM signs MOU with 2M Alliance members

Ocean carrier Hyundai Merchant Marine, which has been struggling to turn a profit in recent years, signed a memorandum of understanding with 2M Alliance members Maersk Line and MSC to join their major east-west vessel sharing agreement.    South Korea’s second largest ocean carrier, Hyundai Merchant Marine (HMM), signed a memorandum of understanding (MOU) with 2M Alliance members Maersk Line and MSC to join their major east-west vessel sharing agreement.
   HMM broke the news today, saying it will join from April 2017, upon finalizing negotiations and approval procedures in each country.
   In addition, HMM noted that by joining 2M, it will be able to strengthen its service offering and achieve improved cost competitiveness, while the 2M carriers will benefit from HMM’s strong presence on the transpacific trade. 
   “The biggest advantage to the 2M cooperation of Hyundai is that they have a relatively good footprint in the Pacific and we perceive that adding that footprint to our existing 2M network would enable us to offer a more comprehensive service to our customers,” Maersk Line Head of Network Anders Boenaes said at a seminar late last month in Panama, held just before the new lane in the Panama Canal opened.
   HMM, which has been struggling to turn a profit in recent years, revealed it would join 2M, following it reaching an agreement with bond-holders to adjust debt and shipowners to adjust charter hire.
   Boenaes noted that HMM had gone through a successful financial restructuring and the company was no longer “the ailing Hyundai that we were talking about at one time. It’s two different companies in terms of health and stability.”
   HMM is currently a member of the G6 Alliance, which also includes NYK, MOL, Hapag-Lloyd, OOCL and APL.
   Three of the four major ocean carrier alliances, the G6 Alliance, the CKYHE Alliance and the Ocean3 Alliance – will all be done sailing their courses by the end of the first quarter of 2017, as carriers will then begin morphing into new alliances.
   The CKYHE Alliance consists of COSCO, Kawasaki Kisen Kaisha (“K” Line), Yang Ming, Hanjin and Evergreen Line; and the Ocean3 Alliance comprises CMA CGM, China Shipping and UASC.
   Starting in April 2017, the OCEAN Alliance and “THE Alliance” will commence operations. The OCEAN Alliance will consist of CMA CGM, China Shipping, COSCO, Evergreen, APL and OOCL; and THE Alliance will include Hapag-Lloyd, MOL, NYK, “K” Line, Yang Ming and Hanjin.
   The first chart below, built using data from ocean carrier schedule and capacity database BlueWater Reporting’s Carrier Ranking Report, compares the nominal total capacity of the combined fleets of the east-west alliances expected to commence operations in April 2017. The chart assumes UASC’s tonnage will be absorbed into that of Hapag-Lloyd.
   With the addition of HMM’s 413,266-TEU fleet, the 2M Alliance will secure its position as the largest vessel sharing agreement with a total capacity of 5,976,748 TEUs. The OCEAN Alliance won’t be far behind, however, as those six carriers will combine to control 5,690,711 TEUs. Meanwhile, THE Alliance (including UASC’s tonnage) will have a total capacity of 4,366,325 TEUs.
  


Source: BlueWater Reporting

   This second chart, built with data from BlueWater Reporting’s Trade Route Deployment Report, compares the current combined weekly deployed capacity of each of the three projected major carrier alliance groups and non-alliance lines in the transpacific. The 2M Alliance, including HMM, will control just 18 percent of the overall market by capacity with a combined 69,956 weekly TEUs, well short of the projected 35 percent share for THE Alliance (137,198 TEUs), assuming UASC’s tonnage is absorbed into that of Hapag-Lloyd, and 40 percent for the OCEAN Alliance (153,622 TEUs).
   Meanwhile, the third chart illustrates how on the Asia-Europe trade, HMM will only contribute 3,524 TEUs a week, bringing the 2M market share up to 34 percent (87,857 TEUs), compared with 35 percent for OCEAN (89,473 TEUs) and 31 percent for THE Alliance (78,990 TEUs).


Source: BlueWater Reporting


Source: BlueWater Reporting