Hyundai Merchant Marine (HMM) aims to become a top 10 global shipping company by ordering 20 super large containerships. HMM is expected to have a capacity of 800,000 TEUs and rank sixth in the world when the company secures a super large containership fleet.
According to the investment bank (IB) industry and shipping industry on November 15, HMM will order 20 large-sized container ships starting early next year. “HMM will order 20 large-sized vessels, including nine 20,000-TEU containerships and 11 11,000-TEU containerships for aggressive fleet expansion,” a high-ranking official in the IB industry said. “This strategy aims to deal with major shipping companies’ expansion through mergers and acquisitions and the introduction of super large ships.” This is twice the size of the order projected in the market (around 10 units). In terms of order sizes (350,000 to 400,000 TEUs), HMM’s order is double that (220,000 TEUs as of the end of October) of Maesk, the world’s top shipping company.
Analysis says that HMM will ramp up the number of super large ships as a strategy to cope with the global division and congregation. HMM currently has 56 vessels and its capacity (maximum shipment volume) is 43,000 TEUs, ranking 13th in the world. On the other hand, Maesk which belongs to the 2M Alliance with HMM has a capacity of 3.55 million TEUs and MSC, 3.02 million TEUs, eight times that of HMM.
In particular, next year, Japan is expected to merge its three major shipping companies (MOL, NYK, and K Line). Then the new shipping company established via the merger is expected to have a capacity of 1.7 million TEUs. China’s major shipping company Cosco (1.81 million TEUs) will finally marry OOCL (670,000 TEUs) of Hong Kong, which is the seventh largest in the world in 2019. Then Cosco’s capacity (including that of ordered ships) will exceed 3 million TEUs, jumping to second or third place in the world. In particular, China’s Cosco (Ocean Alliance) and Japanese shipping firms (THE Alliance) are expected to put 20,000-TEU containerships into the Asian market beginning next year. This means that HMM will not be able to compete in such an environment as the shipping company has a maximum capacity of 400,000 TEU and its largest container ship has a capacity of 13,100 TEUs.
Around the year of 2020, nine 20,000-TEU containerships and 11 11,000-TEU containerships to be ordered beginning next year will be delivered to HMM. Then, HMM will have a capacity of more than 800,000 TEUs, about double its current capacity. This volume exceeds that of now-defunct Hanjin Shipping and close to 1,060,000 TEUs of Evergreen, the biggest shipping company of Taiwan. At the time of the final delivery of the 20 vessels ordered, HMM will raise the number of its over-10,000-TEU vessels from 16 to 36. As HMM’s long-term plan aims at securing a one-million-TEU fleet, the shipping company may order more super large containerships depending on future business performances.