SM Line Corp. will use the proceeds from its initial public offering planned for later in the year to add at least six carriers to its fleet on the U.S. route to specialize in sea transport to the world’s largest economy, says an article published in Pulse News.
Newly launching services
Its investments would include adding ships to widen shipping service bound for Los Angeles and other destinations on the west coast of Americas as well as newly launching service to ports on America’s east coast, like New York and Boston, said Park during his recent interview with Maeil Business Newspaper.
Through the additions, SM Line envisions to generate sales 90 percent from America bound shipping operations and the rest from Asia.
Seeking partnership
The company aims to add at least 10 to 11 container ships for shipping service to America’s east coast, said Park, adding that the company is actively seeking a partnership to better manage the cost.
SM Line is aiming to go public on the Kosdaq this year, having filed pre-IPO review filed in July. The IPO structure has not been revealed.
Eco friendly
SM Line’s new ships would likely be eco-friendly types in active response to the International Maritime Organization’s strategy to cut greenhouse gas emissions to a half by 2050 from the 2008 level. The Korean shipper is also considering acquiring second-hand ships to serve the immediate market demand.
Global shipping demand, especially for transports to America, has been growing explosively since the second half of last year, and shippers cannot meet demand even after hiring old ships, Park said.
Demands heightened
There are 14 more shipping routes bound for America’s west coast in service this year compared to last year, Container shipping rates have further strengthened due to Suez Canal blockage in March and major Chinese ports’ shutdowns amid heightened demand during the year-end season.
Park expected the rates to peak in the latter of the year and stabilize from the second half of next year but did not think the fees to return to pre-pandemic levels, SM Line is expected to beat its best operating income of 173.4 billion won ($147.4 million) recorded for the April-June period in the third quarter.
Planed to run more ships
SM Line had been in the red since inception in 2017. It reversed to profits last year, with operating income of 138.2 billion won, thanks to sharp jump in shipping demand on Asia-America routes with global economy’s recovery from Covid-19 shocks.
SM Line has launched 18 container carriers for America routes since last year and it plans to run 12 more ships from this month until December to service the local exporters, especially small and medium-sized companies, said the CEO.
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Source: PulseNews
