Container liner shipping company Hyundai Merchant Marine (HMM) from South Korea will join THE Alliance. This was reported by Hapag-Lloyd. The Koreans will join the cooperation from 1 April 2020.
HMM was one of the container liner shipping companies that was not part of an alliance, although it did exchange slots on some trade routes under an agreement of strategic cooperation with alliance 2M (Maersk Line and MSC). The company has a contract with 2M until April 2020. The third large container shipping alliance is Ocean Alliance, consisting of CMA CGM, Cosco, OOCL and Evergreen.
Back and Forth
HMM seems to have gone back and forth between trying to become a full member of the 2M alliance and seeking to join another alliance. In December 2018, Hellenic Shipping News reported it expected HMM to leave 2M for another alliance because the company had 'to endure disadvantages in terms of routes' because it was not a full member. In addition, 2M requested 'HMM to restrict new shipbuilding orders when it signed the deal.'
Yet, in April 2019, Maersk told Supply Chain Dive, it was 'looking forward to reviewing options for extending the cooperation in due course' with HMM CEO Jae-hoon Bae looking for ways 'to consolidate the relationship.' Now, HMM has decided to leave after all.
Fleet Expansion
Although the company has been in the red the past couple of years, HMM did order twelve 23,000 TEU vessels, the largest in today's liner shipping market. These will be delivered in the second quarter of 2020, right at the start of the new alliance, and will be deployed in the Far East-North Europe trade. Additionally, eight 15,000 TEU newbuildings will join HMM´s fleet in the second quarter of 2021.
New Cooperation Agreement
THE Alliance was founded by Hapag-Lloyd as well as NYK, MOL and “K”Line (which merged to become Ocean Network Express – ONE) and Yang Ming. It started its cooperation on 1 April 2017. With the addition of HMM, the members of THE Alliance have decided to establish a new cooperation with four members and a term until 2030. The actions were agreed in Taipei on 19 June. Subject to the necessary regulatory approvals, the new contract between the four lines will start on 1 April 2020. THE Alliance expects HMM´s membership to significantly strengthen its competitiveness towards the other two alliances.
Picture: The 13,100 TEU HMM vessel HMM Dream (by Shipping21).
