4th July 2019
South Korean carrier Hyundai Merchant Marine (HMM) is to join THE Alliance when its slot charter agreement with the 2M expires next April.
HMM will become the fourth member of the vessel-sharing group, joining Hapag-Lloyd, ONE and Yang Ming. An agreement signed last week also saw the founding members extend the duration of their alliance until 2030. Hapag-Lloyd chief executive Rolf Habben Jansen said: “HMM is a great fit for THE Alliance as it will provide a number of new and modern vessels, which will help us to deliver better quality and be more efficient.”
Mr Habben Jansen has clearly warmed to the fresh overtures of HMM, previously he said: “We think it is very important that we have a level playing field and we are not in favour of government subsidies in the form that it is being done with HMM.”
THE Alliance has conceded a lot of ground to the bigger 2M and Ocean alliances over the past year, hobbled by the weak financial position of Yang Ming and the botched merger and launch of the Japanese carriers K Line, MOL and NYK as ONE.
HMM has a $2.6bn orderbook for 12 scrubber-fitted 23,000 teu vessels, which will be delivered in the second quarter of next year, and eight 15,000 teu ships stemmed for delivery a year later. Meanwhile, Hapag-Lloyd, the only profitable carrier of the group, was recently rumoured to be talking to Asian yards about ordering 20,000+ teu ULCVs.
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 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.
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.