Maersk and MSC have initiated meetings with Hyundai Merchant Marine (HMM) to discuss the South Korean carrier joining the 2M alliance, says local media reports.
According to Korea Herald, Korea’s second-largest shipping company is considering joining the 2M Alliance, a vessel-sharing agreement between Denmark’s Maersk Line and Switzerland’s Mediterranean Shipping Company - the world’s first and second largest container carriers.
Amid growing speculation that HMM is set to join the alliance, a HMM official confirmed that discussions are ongoing with the alliance parties on June 23.
The company and bigger rival, Hanjin Shipping Co., are among unprofitable liners worldwide that are taking steps including debt restructuring and asset sales to improve their balance sheets as overcapacity and slowing trade lead to a prolonged downturn in rates, says a report in Bloomberg.
The state-run Korea Development Bank and other lenders have threatened to put it under receivership if it fails to lower its debt, cut charter rates and join a global shipping alliance.
Joining the alliance will help Hyundai Merchant reduce costs and improve its competitiveness, the Seoul-based company said the statement.
It will also enable Maersk and Mediterranean Shipping to bolster their services on trans-Pacific routes, said the Korean company, which ended talks to join The Alliance, whose members include Hapag-Lloyd AG and Hanjin Shipping.
Previously, HMM had tried to enter another six-party partnership, The Alliance, consisting of HMM’s local rival Hanjin Shipping, Hapag-Lloyd, K Line, Mitsui O.S.K. Lines, Nippon Yusen Kaisha and Yang Ming. However, Hanjin Shipping and Japan’s K Line were reluctant to accept HMM’s request, local news reported.
According to industry insiders, HMM’s entry will be able to strengthen Asian trade lane of European-based 2M alliance, which had relatively low representation in the region.