Hyundai Merchant Marine (HMM) has signed on to join the 2M alliance from April next year. HMM will join Maersk and MSC in the vessel sharing partnership, marking the latest sign that the Korean line is finally coming out of its financial woes.
“By accessing 2M VSA network, HMM will be able to strengthen its service offering and achieve improved cost competitiveness. The 2M carriers will benefit from a reinforced service competency in Asia and improved network cover in the transpacific area,” HMM said in a release today.
HMM added that it has now completed all conditions set out in the voluntary agreement with creditors from March 2016 and in accordance with the completion of such preconditions, the planned debt-for-equity swap by creditors will be executed as planned.
No new name for 2M has yet been revealed.
HMM had initially been rebuffed from entering THE Alliance, another container grouping, at which point it reached out to Maersk and MSC.
Reacting to the news, Lars Jensen from SeaIntel Consulting told Splash: “For Maersk Line and MSC this will mean a stronger network on the transpacific from 2017 – like with a combination of larger vessels and possible more weekly services compared to the current 2M network.”
For HMM, 2M membership provides access to an east-west network which is even more competitive than the one it is currently a member of, Jensen suggested, while also noting 2M membership provides HMM with a strengthened position towards the banks in terms of securing its financial future.
Neil Dekker, Drewry’s director of container research, commented: “Many industry observers will be rather surprised that HMM seems to be aligning itself with the big 2M carriers after the signing of an MOU agreement. At face value, it still appears that HMM has much more to gain from this deal in terms of overall security, service reliability and access to a huge network and other add on benefits, rather than the other way round.”
Dekker said HMM’s transpacific exposure had been overplayed.
“Available statistics show that HMM is by no means a top five player in terms of headhaul market share,” Dekker noted.
The Drewry consultant said entrance to 2M could see a new order for big ships by HMM.
Drewry last month suggested Maersk might be interested in buying HMM, something Dekker still believes is a possibility.
“This could still be the first step in a potential Maersk acquisition which gives the Danish company the opportunity to closely look at HMM first hand,” Dekker said, before cautioning: “However, the previous major acquisition of P&O Nedlloyd did not go to plan. ”
Dekker also said that today’s announcement “brings an end to the alliance merry-go-round”.
“This is a positive for the industry and watching shippers as some kind of stability is desperately needed. The lines can get on with planning their vessel deployments for early 2017 which remains crucial for the immediate health of the industry,” Dekker said.
With the announcement from HMM, the only major global carriers without an alliance membership are ZIM and Hamburg Süd.
“Given their modus operandi until now, it may also well be that they remain outside the alliances and instead continue to rely on vessel sharing agreements where it suits their purposes,” SeaIntel’s Jensen said.
A spokesperson for Maersk Line said no new name for 2M has been created yet, while one wag on Twitter suggested the Korean newcomer should push for HMM as the new name for the vessel sharing agreement.
There was nothing broken through the P&O Nedlloyd acquisition. Quality people, ships and Customers acquired, and a business case which made perfect sense. Seamlessly executed. There was a temporary loss of combined market share, which is natural and expected, and will be present during any major acquisitions.