HMM to Increase Middle East-Asia Coverage
As Hyundai Merchant Marine aims to take advantage of a surge in shipping demand following the lifting of sanction on Iran, the South Korean shipping giant revealed plans to expand its routes which link the Middle East and the Asia regions, according to Yonhap News Agency.
The company reportedly said that it will send a total of twelve containerships to operate on two separate shipping routes between the regions, as HMM expects its market share for the route to grow from 8 percent to 13 percent.
HMM currently operates one route between the Middle East and Asia.
Due to a weak demand in the container shipping industry, at the end of June the shipping company started discussions with the world’s largest alliance 2M, which comprises Maersk Line, the A.P. Moller-Maersk A/S shipping unit, and Mediterranean Shipping Company (MSC), on the possibility of HMM joining the 2M vessel sharing agreement (2M VSA) when their membership of the G6 alliance expires in 2017.
“We are positively reviewing the proposition. The inclusion of Hyundai Merchant Marine in 2M would for example provide us with extended coverage and a stronger product in the Transpacific trade,” Maersk Line’s COO, Søren Toft, told World Maritime News.
The announcement was made after cash-strapped HMM reached agreements with containership owners on 20 percent charter rate cuts and with owners of bulk carriers for 25 percent charter rate reductions, which are expected to come in force over the next three and a half years.
After it gained the bond holders’ approval for its debt restructuring proposal, the company’s creditor-led restructuring scheme encountered a hurdle last week due to HMM’s inability to find a global shipping alliance to join, and has therefore been pushed to late July.
Under the terms set by its creditors, led by the state-run Korea Development Bank (KDB), HMM needs to fulfill the restructuring prerequisites, which include a debt recast, reaching agreement on charter rate cuts and becoming a part of a global shipping alliance.
The company faces a USD 4.48 billion wall of debt.
World Maritime News Staff