HMM To Strengthen Fleet With $4 Billion Pledge Amid Shipping Industry Reorganization

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  • South Korea has committed $4 billion to enhance its container shipping fleet to 2 million TEUs by 2030, focusing on national flagship carrier HMM as part of THE Alliance (THEA).
  • This move aims to maintain competitiveness amid Hapag-Lloyd’s impending departure from THEA.

South Korea has pledged $4 billion to expand its container shipping fleet to 2 million TEUs by 2030. The focus is on national flagship carrier HMM, a member of THE Alliance (THEA), in light of industry reorganization and Hapag-Lloyd’s upcoming departure from THEA.

Impact of Hapag-Lloyd’s Departure

Hapag-Lloyd’s exit from THEA will leave the alliance with ONE, HMM, and Yang Ming, with a combined capacity of 2.5 million TEUs, making it the smallest container shipping alliance. South Korean president Yoon Suk-yeol emphasized the need to support national shipping companies during this transition.

Analyst’s Perspective

Linerlytica analyst Tan Hua Joo noted the pressure on THEA to stay competitive against Gemini and Ocean Alliance, as Hapag-Lloyd’s departure will weaken the group. Yang Ming, the smallest of the main carriers, must also take action to remain competitive.

HMM’s Strategic Review

HMM is reviewing its strategy, including expanding its operated ships. The initial plan was to achieve a fleet of 1.5 million TEUs by 2030, but since 2021, it has ordered a dozen 13,600 TEU ships, nine 9,000 TEU ships, and three 1,800 TEU feeder vessels, with deliveries scheduled for completion by 2026.

Current and Future Fleet

Currently, HMM’s in-service fleet stands at 801,308 TEUs. In June 2022, HMM agreed to charter two 7,700 TEU vessels from Navios Maritime Partners for 14 years, starting from their delivery later this year.

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Source: The Loadstar