On Monday, Hyundai Merchant Marine's CEO announced plans to order ten new ships, including five container vessels – a deviation from recent trends in a slow shipping and shipbuilding market.
HMM CEO Yoo Chang-keun told a group of reporters at his firm's Seoul headquarters that he has a clear strategic plan: secure new capacity through a partnership with MSC and Maersk; order five small/midsize container ships and three to five tankers; and obtain five percent market share and five percent operating margin within five years.
“Some say the recent partnership [with 2M] is not full-fledged,” Yoo told Korea Joongang Daily. “I know some underestimate the value of the recently inked strategic partnership, but it was the best deal considering the current situation of the company."
Yoo said that the vessel-sharing arrangement, even if somewhat short of a full-fledged alliance, had "secured shipping capacity that exceeds our current operation capacity . . . and it is even a 20 percent increase compared to when we were part of G6, our former alliance.”
However, analysts with Alphaliner say that HMM accepted the deal with 2M on less than favorable terms: Maersk and MSC will assume control of some of HMM’s USEC and Asia-Europe services, and HMM will only have access to a limited number of 2M vessels by purchasing slots – an arrangement that will leave HMM unable to negotiate terms with terminal operators, Alphaliner said.
Business Korea reported Tuesday that some members of HMM's leadership are not entirely satisfied with the agreement. "2M intended to create a negative image of HMM through an alliance membership issue as American market contracts will start in earnest in February and March of next year," said Lee Sang-shik, HMM’s lead negotiator in the 2M talks.