One of the best known names in the intra-Asia box trades, Heung-A from South Korea, has been forced to send a letter to clients denying it is in financial difficulty. Following a slew of service rationalisations and a weak 2017 financial performance, market rumours had surfaced that the line was at risk of following compatriot Hanjin Shipping into oblivion.
The company has axed four services recently on the notoriously cut-throat intra-Asia trades. However, Heung-A cited the low profitability on these routes as the reason for their termination which was all part of a “normal restructuring process”, Heung-A management stated in its letter to customers, seen by Alphaliner.
The Korean company dismissed rumours that it is planning to terminate all its Southeast Asia and China services. It said it is “studying and planning to announce new routes or slot purchases in the near future to further complement its existing services”.
Heung-A, founded in 1961, is the world’s 29th largest liner, operating 37 ships with 46,068 slots. Its fleet more than doubled in size from 2011 to peak at more than 50,000 slots by the end of last year. In addition to its container shipping business, it has a small fleet of chemical tankers.
For 2017, Heung-A posted a net loss of $69m, while the year before it registered a $16m net loss.