HMM CEO Kim Kyung-Bae sees Hapag-Lloyd's exit from THE Alliance as a significant opening for South Korea's leading carrier to broaden its reach. 

Hapag-Lloyd's departure from THE Alliance is imminent as it gears up to establish the Gemini Cooperation alongside Maersk Line in February. This move will consequently reduce THE Alliance's membership to include only ONE, HMM, and Yang Ming.

Mr. Kim has announced that HMM intends to enlist the expertise of an external consultancy to formulate a strategic plan for the anticipated expansion of their business in the mid- to long-term.

Amid speculation regarding potential collaboration between HMM and fellow container carriers, a spokesperson stated, "Our fundamental stance remains opening avenues for dialogue with domestic operators when opportunities arise. We maintain a stance of readiness for cooperation."

Some other articles you may be interested in:

👉 Trans-Pacific container prices continue to DECREASE WITHOUT BRAKES

👉 Q4 2023: Sees shipping carriers suffer $1.44B EBIT loss

👉 Top 10+ largest sea ports in the US with billions of USD/year revenue

With a focus primarily on intra-Asia lanes, South Korean container carriers, excluding SM Line, which operates in both transpacific and intra-Asia routes, remain prominent in the regional shipping landscape.

On April 15, as South Korea’s Ministry of Oceans and Fisheries announced President Yoon Suk-yeol’s initiative to bolster the domestic container shipping fleet to 2 million twenty-foot equivalent units (TEU) by 2030, HMM revealed plans to expand its containership fleet to 1.5 million TEU by that time, up from slightly over 800,000 TEU.

The ministry has announced plans to allocate approximately $2.5 billion to support other South Korean container carriers. These carriers, with a combined fleet of about 400,000 TEU (twenty-foot equivalent units), are set to expand their fleet capacity to reach 500,000 TEU.

According to Linerlytica analyst Tan Hua Joo, speaking to The Loadstar, SM Line, the sole South Korean operator of long-haul routes, could potentially be an appropriate collaborator for HMM. However, its fleet of 68,500 teu falls short in filling the void created in the alliance by Hapag-Lloyd's departure. This development will leave THE Alliance with 2.5 million teu, rendering it the smallest alliance, despite expansion strategies outlined by ONE and HMM.

Mr. Tan emphasized that the inclusion of SM Line would only marginally affect the competitiveness of THE Alliance, particularly on the Asia-Europe and transatlantic routes, which are poised to face substantial setbacks following Hapag-Lloyd's departure.