Hyundai Merchant Marine, Korea’s only national flag carrier, has regained its right to run the Busan New Port Terminal, which it had sold due to financial difficulties.
The shipper has been pushing hard to regain its global competitiveness in line with the Korean government’s efforts to rebuild the shipping industry.
In April, the government came up with a five-year plan to revitalize the shipping industry and make Korea a maritime powerhouse again.
The Ministry of Maritime Affairs and Fisheries held a ceremony on May 15 to mark the signing of a basic agreement for joint operation of the Pier 4 at Busan New Port between HMM and PSA, a Singapore-based port operator.
HMM and PSA will each hold a 50% stake in Busan New Port Pier 4 (Hyundai Pusan New Port Terminal or HPNT). HMM will appoint the CEO of the joint venture while PSA will name the CFO.
HMM has regained its stake in HPNT and operating rights, thereby reducing the burden of having to pay port fees. At the same time, by securing dedicated terminals, it will be able to provide stable and competitive services to shippers and will reduce fuel oil consumption and ensure punctuality by preventing unnecessary waits of ships. HPNT accounted for about 1.2 million TEUs, about 30% of the total transaction volume of HMM last year, which was about 4 million TEUs.
In addition, by eliminating the provisions on terminal operation, acquisition, and development restriction in Busan, Gwangyang, and Gyeongnam areas, HMM now can pursue stable, high profits through entry into the terminal business. By accumulating the experience of terminal operation, the company will enhance its capabilities as a terminal operator, and secure an opportunity to enter the terminal business. By attracting alliance member shipping companies to Pusan port in the future, it will pursue an increase in transshipment in Busan Port and profits.