Thursday, June 23, 2016

Pressure is on for Global Container Shipping Line to Switch Freight Alliances

Box Carrier is Told to Find New Partners by Bankers
Shipping News Feature
SOUTH KOREA – WORLDWIDE – In a surprise move, Hyundai Merchant Marine (HMM) has entered into talks with the world’s two largest shipping lines Maersk and Mediterranean Shipping Company (MSC) to join the 2M container alliance (but what will they call it then? Ed). The move, if accepted, will boost 2M’s global market share, at 27.7% of the world’s fleet already the largest such grouping, and potentially see significant improvements for shippers in the Trans-Pacific trade route.

Financially troubled HMM had initially expressed great interest in joining the THE Alliance (a name most infuriating to all but the partners), but supposed reluctance from some of the members of the proposed collaboration, particularly local rival Hanjin Shipping, in addition to the recent restructuring measures HMM is in the process of fully incorporating has led to a setback in its membership.

HMM has been implementing these restructuring measures as set out by its creditors, led by state-run Korea Development Bank (KDB), in order to avoid court receivership. One of these measures is a specific requirement that HMM successfully joins a global shipping alliance.

The South Korean shipping line is currently part of the G6 alliance, made up of OOCL, APL, Hapag Lloyd, HMM, MOL, and NYK, but recent announcements of new container alliances has left Hyundai Merchant Marine out of the loop, with APL becoming part of CMA CGM and its new collaboration, the Ocean Alliance along with OOCL, and Hapag-Lloyd, MOL, and NYK joining forces with other container lines to form the THE Alliance. The G6 vessel sharing agreement is set to expire in 2017.