HMM CEO Kim Kyung-Bae believes Hapag-Lloyd’s departure from THE Alliance will be a big opportunity for South Korea’s flagship carrier to expand.
Hapag-Lloyd will leave THE Alliance to form the Gemini Cooperation with Maersk Line next February, leaving ONE, HMM and Yang Ming as THE Alliance’s surviving members.
Mr Kim said HMM would select an external consultancy to devise a mid- to long-term strategy for the expected business expansion.
And on the speculation that HMM could work with its compatriot container carriers, he said: “Our basic position is that we will open any window for dialogue with local operators if there are opportunities. We always keep room for cooperation open.”
Apart from SM Line, which is active in transpacific and intra-Asia routes, other South Korean container carriers concentrate on intra-Asia lanes.
On 15 April, when South Korea’s Ministry of Oceans and Fisheries officially promulgated President Yoon Suk-yeol’s plan to increase the locally owned container shipping fleet to 2m teu by 2030, HMM disclosed that by then, it will have built up its containership fleet to 1.5m teu from just over 800,000 teu.
The ministry said around $2.5bn would be earmarked to help other South Korean container carriers, which have a current total fleet of approximately 400,000 teu, to expand their fleet to 500,000 teu.
Linerlytica analyst Tan Hua Joo told that, SM Line, as the only South Korean operator of long-haul routes, would be a suitable partner for HMM, but its fleet of 68,500 teu was not sufficient to fill the gap in the alliance left by Hapag-Lloyd. THEA will be left with 2.5m teu, making it the smallest alliance, although ONE and HMM have outlined fleet expansion plans.
Mr Tan said: “The addition of SM Line will have an immaterial impact on THE Alliance’s competitiveness on the Asia-Europe and transatlantic where it will be significantly weakened by the departure of Hapag-Lloyd.”