Hyundai Merchant Marine must make an all-out effort to return to the black with the help of mega-container ships.
This was the message that South Korea’s Minister of Oceans and Fisheries, Moon Sung-hyuk, gave to HMM’s President and CEO, Bae Jae-hoon, during a meeting at the liner operator’s office in Seoul on 4 February.
Moon was checking on the progress of HMM’s plan to normalise its operations, including the company’s entry into THE Alliance and the imminent delivery of a dozen 23,000 TEU mega-container ships from Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering.
Moon told HMM, “This year is a very important year for the revival of the shipping industry. Please concentrate all efforts to secure stable cargo volumes and improve business results in line with the introduction of super-large ships.
“Let’s work together so that people can feel the results that are derived from human resources.”
From 1 April, HMM will leave the 2M network, which comprises Maersk Line and Mediterranean Shipping Company, to become part of THE Alliance, which is currently comprised of Ocean Network Express (ONE), Yang Ming and Hapag-Lloyd.
HMM narrowly escaped bankruptcy in 2016 when Hyundai Group sold off a number of assets and subsidiaries to raise funds and renegotiated rates for period-chartered ships in a monumental self-rescue effort.
The company also swapped debt for equity, resulting in government-controlled entities, namely the Korea Development Bank, Korea Credit Guarantee Fund and Korea Ocean Business Corporation taking significant stakes in HMM.
However, since then, HMM has struggled to realise profits, in the face of stiff competition and economic weakness. The situation saw Bae, who formerly headed the LG group’s logistics unit, Pantos Logistics, to be appointed president and CEO of HMM in March 2019.