South Korean container shipping line Hyundai Merchant Marine (HMM) announced it has entered into an alliance with two local competitors in a bid to beef up its presence in the intra-Asia trade against bigger rivals.
HMM said on January 3 it has signed a memorandum of understanding with intra-Asia network carriers Heung-A Shipping and Sinokor Merchant Marine to form the HMM + K2 consortium.
Sinokor Merchant Marine specializes in shipments between South Korea and China, while Heung-A Shipping has a well-established shipping line to and from Japan.
The consortium will start operations in March after the formal contract signing next month. It will cover Japan, China, and Southeast and Southwest Asia trades, with the agreement to be automatically renewed for successive two-year terms.
“HMM will acquire competitiveness against mega shippers, as HMM will fully access Heung-A and Sinokor’s intra-Asia networks which particularly focus on the Korea-Japan and Korea-China trades etc.,” said HMM.
“This consortium will result in cost savings and improvement in customer services for Heung-A and Sinokor which also strengthen their weak points in tri-party services.”
HMM + K2 consortium will include vessel sharing, slot exchange, and slot purchase agreements. There are also additional plans to bring in joint investment in port infrastructure and sharing of container equipment in the medium and long term.
Under the local alliance, HMM may freely use the shipping lines to China and Japan currently owned by its two new partners, while the alliance is expected to allow the two smaller shipping lines to improve the overall quality of their services.
The three companies are also expected to jointly develop new shipping lines to other countries.
The new alliance comes less than a month after HMM partnered up with 2M Alliance, the world’s largest shipping association, to share and exchange vessel space.
HMM said any additional vessel space secured under its partnership with the international alliance will not be subject to cooperation under its latest local alliance.
Still, its local alliance is expected to help maximize the benefits from its partnership with 2M, a company official noted, saying once the company begins its business cooperation with 2M in April, it will need to strengthen its feeder services. “Working with the two regional shipping lines that have strong feeder services will likely create great synergy,” the official said.
Photo: Hummelhummel
