- HMM, South Korea’s leading shipping company, plans to significantly expand its fleet of container and bulk carriers by 2030 to enhance its global competitiveness.
- This comes at a time when the shipping industry faces challenges from plunging freight rates and economic slowdowns.
Expansion Plans
HMM aims to increase its cargo capacity for container ships to 150 twenty-foot equivalent units (TEU) by 2030, up from the current 92 TEU. This increase would bring the company’s fleet size to 130 container ships, compared to its current fleet of 84 ships.
For bulk carriers, HMM plans to almost double its cargo capacity to 12.28 million deadweight tonnage (DWT), which would amount to 110 vessels. Currently, the company operates 36 ships with a total cargo capacity of 6.3 million DWT.
HMM’s mid-term growth plan, including specific details, is expected to be revealed within the first half of 2024. Currently, the company holds just a 2.7% share of the global container shipping market.
Industry Challenges
The shipping industry experienced a drop in freight rates in 2023, with rates returning to pre-pandemic levels due to economic slowdowns and an increase in large container ship deliveries. The Shanghai Containerized Freight Index, a benchmark index, dropped to 1,006 in 2023, compared to 3,410 in 2022 and 3,792 in 2021.
Additionally, Asian freight cargo carriers face challenges as leading shipping companies move to establish a new alliance among western carriers, scheduled for February 2025.
Environmental Initiatives
HMM aims to comply with global environmental standards by achieving zero emissions by 2045, five years ahead of its original plan. This includes improving energy efficiency, building eco-friendly vessels, and securing low-emission fuels.
The Korea Ocean Business Corp. plans to inject fresh capital into domestic shipping firms by acquiring their green bonds. The state-run agency will also offer new loans to Korean shippers with high environmental, social, and governance (ESG) ratings at lower interest rates than the market average.
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Source: KED Global
