Shrinking Korean Shipping
Global shipping companies are increasing their bottoms aggressively to pose concerns to Korean players. Even those in the middle rank are poised to catch up with Korean shipping companies, while the gap between industry leaders is widening.
According to French analyst Alphaliner, Hanjin Shipping and Hyundai Merchant Marine are recording an order backlog of 70,720 TEUs and 86,200 TEUs as of July this year, respectively. The amounts are easily eclipsed by those of Maersk, MSC, and CMA CGM, which range from 220,000 TEUs to 430,000 TEUs. On the list headed by the three, Hanjin Shipping and Hyundai Merchant Marine ranked eighth and 15th each. APL took the ninth position and OOCL 11th. The official order backlog of Hapag-Lloyd has yet to be confirmed.
Korean companies are likely to keep falling in the chart, as the middle rankers are expanding their business at an aggressive pace. MOL, which is in 10th place, is expected to increase its freight space to 682,792 TEUs in a couple of years to overtake Hajin Shipping, and those of Hamburg Sud Group (12th) and Yang Ming (14th) are estimated to go up to 610,000 TEUs and 630,000 TEUs. UASC, ranking 19th, has an order backlog of over 270,000 TEUs and is expected to drag down Hyundai Merchant Marine within two to three years.
The aggressive expansion can be attributed to decreasing shipbuilding costs resulting from a market slump. When a shipping company establishes a cutting-edge fleet with high fuel and operating efficiencies during this period, it can endure low freight charges. Korean companies, however, are in no position to place new large-scale orders, because they are busy improving their financial structures.