Hyundai Merchant Marine (HMM), South Korea’s flagship carrier, continues to post the worst results of all the major carriers around the world.
HMM’s Q2 results work out more seven times worse than peers such as Evergreen or Hapag-Lloyd.
HMM’s operating margin for its container shipping business declined further to -16.4% in the second quarter.
Alphaliner data shows HMM has held the bottom position among the main carriers for the seventh consecutive quarter, having taken over the spot from compatriot Hanjin Shipping who filed for bankruptcy in the third quarter of 2016.
HMM’s total liftings increased by 17.1% to 1.15m teu in the second quarter, its highest ever volume due mainly to an aggressive expansion path that included the launch of a standalone Asia-Europe service in April this year.
However, HMM’s average freight rates dipped to their lowest levels on record, as its average revenue per teu fell to only $873 per teu compared to $973 per teu in the second quarter last year.
Commenting on HMM’s results via LinkedIn, Lars Jensen, a partner at SeaIntelligence Consulting, noted the carrier had lost $167 per teu in the second quarter. Volumes grew 17% year-on-year.
“It, once again, begs the question whether organic pursuit of market share in order to ostensibly achieve scale benefits is a profitable venture in the new, more consolidated, liner landscape,” Jensen mused.
In a release yesterday, HMM said that it expected higher freight rates and load factors in the third quarter.
“HMM will maximize its enterprise-wide efforts to improve its efficiency and bottom line through rationalizing service routes and pursuing economical speed to reduce bunker costs in order to overcome depressed shipping market,” the company stated.