Rather Than Cooperation

Hyundai Merchant Marine (HMM) and SM Line are competitively entering into a partnership with shippers and ship owners at home and abroad.
Hyundai Merchant Marine (HMM) and SM Line are competitively entering into a partnership with shippers and ship owners at home and abroad.

 

Hyundai Merchant Marine Co. (HMM) and SM Line Corp. have succeeded in establishing partnerships with large companies at home and abroad one after another. Earlier, the two companies decided to find ways to survive separately rather than cooperation between the national flag carriers under the government’s intervention.

According to shipping industry sources on March 20, HMM and SM Line are competitively entering into a partnership with shippers and ship owners at home and abroad. HMM signed a long-term contract worth 190 billion won (US$177.32 million) with GS Caltex Corp. to ship crude oil for the next five years. HMM also signed a long-term shipping contract with GS Caltex on February 1 to deploy two Very Large Crude Carriers (VLCCs).

With the latest contract, HMM will transport a total of 19 million tons of crude oil from the Middle East to South Korea over a period of five years from July 1, 2019 to August 31, 2024. HMM will deploy two 300,000 dwt VLCCs which were ordered last September.

An official from HMM said, “New VLCCs that were built as part of the government’s policy to support the shipping industry not only created a synergy between the shipping and shipbuilding industry but also made the long-term shipping deal with domestic shippers, becoming the first case of cooperation between shipper, shipbuilder and consignor.”

SM Line has decided to maintain a mutual cooperation system with Cosco Shipping Lines Co., the largest global shipping firm in Asia. One reason SM Line, a small container shipping company formed from the remaining assets of Hanjin Shipping, partnered with Cosco may be because the Chinese company and Hanjin Shipping were in the same global alliance before Hanjin was wiped out. SM Line CEO Kim Chil-bong recently met with Cosco Shipping Lines CEO Wang Haimin to discuss detailed issues to enhance collaboration between the two companies.

The two companies have agreed to expand the scope of cooperation to the ocean, including the Americas, in the medium and long term.

An official from SM Line said, “When SM Line recovers 600,000 TEU of the shipping capacity of former Hanjin Shipping through financial support at the group level and financial support from domestic financial companies at the right time, the company will be able to recover partnerships with global large shipping companies, including Cosco, early.”

Cosco has become the largest shipping company in China after merging with China Shipping Co. according to the Chinese government’s “One China” shipping strategy in 2016.

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