HMM CEO to Step Down
Chang Keun Yoo, president and CEO of South Korea container line Hyundai Merchant Marine (HMM) has decided to resign from his position next month.Chang-Keun Yoo has been Chief Executive Officer and President of Hyundai Merchant Marine Co. Ltd since April 02, 2013 and serves as its Chairman of the Board. Yoo served as an Executive Vice President of Hyundai Merchant Marine Co. Ltd., and Head of HMM Europe Ltd.According to a report in WSJ, he has offered to resign after months of being under pressure from its top creditor to quit over failures in its turnaround.
South Korea's SK Group to Sell SK Shipping
South Korea's large family-owned business conglomerate SK Group is planning to get out of shipping by offloading shipping subsidiary SK Shipping Co., on account of the debt burden amid an industry slowdown.According to a report in the Pulse, SK Holdings Co., the holding entity of SK Group, is reportedly seeking to sell a majority of its stake in SK Shipping to local private equity firm Hahn & Co. for an estimated 1.5 trillion won ($1.3 billion).Hahn & Company is said to be reviewing…
Hyundai Merchant Marine Cargo Processing at Busan Port Hits Record
Hyundai Merchant Marine (HMM) announced that its cargo processing at Busan Port for January to July 2018, has hit a new record.Processed cargo during the first seven months of this year reached 1,157,980 TEU, an increase of 14.3 percent year-over-year.For the volume of exports and imports has recorded 608,872 TEU, a soaring 14.1 percent year-over-year.Also, the transit cargo volume increased from 473,341 TEU to 541,926 TEU, up 14.5% year-over-year.HMM attributed the performance to its service & volume reliability…
Container Shipping Bankruptcy Lends Insight on Potential Fallout from Trade War
Global trade tensions have captured headlines in recent months, as the imposition of a series of tariffs and counter-tariffs by various global trade counterparts has raised questions about the possibility of a trade war. Such development could potentially have an impact on global trade flows, and, consequently, the companies which facilitate international movement of goods.Though the situation is still developing and the final impact is uncertain, Gregory Draco, the Chief U.S. Economist at Oxford, predicted in July that the tariffs would create an 0.1 percent to 0.2 percent drag on U.S. GDP.
Government Okays USD 1.2 bln for Korea Ocean Business Corporation
The government of South Korea decided to invest 1.35 trillion won (USD 1.2 billion) in Korea Ocean Business Corporation (KOBC). The compnay was created in order to help its shipping industry stand on its feet, especially after the bankruptcy of Hanjin Shipping.Yonhap reported quoting the finance ministry that Cabinet approved a plan to contribute 12.7-percent stakes in each of the country's four port authorities to the KOBC.Earlier this month, the corporation was officially launched in Busan…
South Korea Eximbank Pledges Huge Loans to Shipping
As part of the government's large-scale rescue plan for shipping sector, the Export-Import Bank of Korea (Korea Eximbank) sets a figure for loans and guarantees to the country's shipping sector. According to Yonhap, Korea Eximbank will funnel more than 800 billion won ($749.3 million) in shipping finance as a part of the state-sponsored program to revive the shipping industry following the collapse of Korea’s flag sea carrier Hanjin Shipping. The five-year plan for rehabilitating the maritime sector involves the building of more than 200 ships…
Sinokor, Heung-A Integrate Shipping Operations
South Korean shipowners Heung-A Shipping and Sinokor Merchant Marine have confirmed that they are in talks to merge their container businesses, reports Pulse News. According to various media reports, the South Korean liner companies have decided to merge their container shipping services by the end of the year before joining forces with Hyundai Merchant Marine (HMM). HMM had already agreed to become a strategic partner to Sinokor and Heung-A by creating an HMM+K2 consortium. The two companies would sign the deal on April 3…
Hyundai Merchant Marine’s Expansion Plans: Drewry
Korean carrier Hyundai Merchant Marine (HMM)’s expansion plans are incompatible with market stability. Will it settle for more limited ambitions? An Analysis by Drewry. South Korean carrier Hyundai Merchant Marine (HMM) is back in the news with an impending order for as many as 14 Ultra Large Container Vessels (ULCV) of 22,000 teu and for its intriguing re-entrance into the Asia-Europe market as a vessel provider, with reports suggesting a new standalone service called Asia Europe Express (AEX) using 10 Classic Panamax ships of 4,700 teu will commence in April.
Germany and Greece: Worst Vessel Dumpers
As in 2016, Germany and Greece top the list of country dumpers in 2017, according to new data released today by the NGO Shipbreaking Platform. German owners, including banks and ship funds, beached 50 vessels out of a total of 53 sold for demolition. Greek owners were responsible for the highest absolute number of ships sold to South Asian shipbreaking yards in 2017: 51 ships in total. Since the Platform’s first compilation of data in 2009, Greek shipping companies have unceasingly topped the list of owners that opt for dirty and dangerous shipbreaking.
South Korea Jails Former Hanjin Shipping Chairwoman
The former chairwoman Choi Eun-young (55) of the now-defunct Hanjin Shipping was jailed 18 months for insider trading, reports Yonhap. According to the report the Seoul Central District Court found Choi guilty of selling off her family-stake in the shipping company days before it declared a court-led debt restructuring plan. She was also fined with USD 1.09 million. The court said, although her charges are grave enough to deserve a heavy punishment, it considered that the stake…
FMC's Doyle to Exit Commission in January, 2018
Today, the Office of Commissioner William P. Doyle of the U.S. “Last week, I notified The President of the United States Donald J. Trump of my intention to leave the Federal Maritime Commission effective January 3, 2017. It has been an honor and a privilege to continue serving in the Trump Administration. I thank President Barack Obama for nominating and appointing me twice as a Commissioner. “I am proud to have worked alongside my fellow Commissioners and with such a dedicated and hardworking Commission staff.
THE Alliance Sets $50 Mln Insolvency Contingency Fund
Remarks from Federal Maritime Commissioner William P. Doyle at the FTR Transportation Conference 2017, Indianapolis, Ind. On September 13, 2017, I voted to expedite the Commission’s decision and support THE Alliance’s amendment authorizing creation of a contingency trust fund designed to protect customers’ cargo and the ocean transportation chain should one of THE Alliance’s carriers experience financial distress or an insolvency event. I support the goal behind this amendment: the smooth and continuous flow of cargo even in the face of another ocean carrier bankruptcy or catastrophic failure.
Drewry Warns BCOs to Adapt Their Contract Strategy
International transport and logistics executives using container shipping are facing the biggest shift in their ocean provider base for 20 years and must adapt their procurement and contract strategy, according to ocean freight procurement consultancy Drewry Supply Chain Advisors. In the last five years, beneficial cargo owners have been able to secure large reductions in freight costs by running traditional competitive bids with numerous providers in an over-supplied, fragmented market.
Korea to Establish Maritime Promotion Corporation
Korea Maritime Promotion Corporation (KMPC), a dedicated support organization for the shipping industry, will be established in Busan in June of next year with capital of 5 trillion won (US$4.5 billion), reported BusinessKorea. KMPC is set to offer financial and industrial policy support, in order to reform and upgrade the shipping industry in Korea, in response to the Hanjin Shipping bankruptcy. At Seoul meeting of the ministers of economic affairs, on 24 August, South Korea’s Ministry of Oceans and Fisheries announced a plan to establish Korea Maritime Promotion Corporation…
FMC Commissioner Doyle Weighs in on THE Alliance Proposed Amendment
Federal Maritime Commissioner William P. Doyle issued a statement addressing THE Alliance’s filing of an amendment to add further detail to protections in the event of an insolvency. I am pleased that The Alliance is seeking Federal Maritime Commission authority to form, contribute funds to, develop rules for, and administer a contingency fund designed to protect against the effects of one of the parties experiencing financial distress or an insolvency event. Parties to THE Alliance Agreement (Agreement No.: 012439) filed an amendment with the Federal Maritime Commission on August 7…
Hanjin Shipping: No Cash to Pay Creditors
Hanjin Shipping Co., the South Korean shipping company that caused havoc when it filed for bankruptcy, is struggling to raise enough money to repay $10.5 billion in creditor claims, WSJ reported. Hanjin has raised only $220 million by selling ships, stakes in seaport terminals and other assets to repay its more than 180 creditors. A trustee charged with Hanjin Shipping’s Korean bankruptcy case in in Seoul said Hanjin has raised about $220 million since filing for bankruptcy nearly a year ago. At least 180 creditors were present for the court hearing on June 1, 2017.
Japan's Big Three Shippers Bullish
Japan’s big three shippers -Mitsui OSK Lines (MOL), Nippon Yusen Kabushiki Kaisha (NYK) and Kawasaki Kisen Kaisha (K Line) - have reported profits for the first quarter, bouncing back from losses a year earlier Reuters reported. Thanks to rising freight rates, the shippers showed brightened financials ahead of their integration into the Ocean Network Express (ONE) next April. The results are also raising hopes the firms could be emerging from the industry’s worst-ever downturn on record. NYK recorded a profit attributable to owners of the parent of 5.4 billion yen (U.S.
Hyundai Merchant Marine Seeks USD 8.9 bln from KDB
Hyundai Merchant Marine (HMM) requested the Korea Development Bank (KDB) to support with a total of 9.9 trillion won (US$8.9 billion) in funds until 2022 to grow into the 8th largest global shipping company in the future, Business Korea reported. HMM had asked consulting firm AT Kearney to estimate how much support funds for HMM would be needed. AT Kearney calculated that a total of 9.9 trillion won will be needed, including 5.6 trillion won (US$5.0 billion) for large container ships…
CMA CGM Posts Higher Q1 Profits
Container shipping line CMA CGM posted higher first-quarter profits, helped by a turnaround at recently acquired NOL, and gave an upbeat assessment for the current quarter in another sign that the shipping industry is emerging from a slump. The French-based group reported on Friday a first-quarter net profit, including Singapore-based NOL which it consolidated in June last year, of $86 million compared with a $100 million loss in the same period of 2016. This was also above the…
Death Toll On The Rise at Chittagong Shipbreaking Yards
Two workers lost their lives at the Chittagong shipbreaking yards in the last two weeks, bringing the total death toll this year to six workers, reports NGO Shipbreaking Platform. On 6 May, 26-year-old Shahinoor died at Jamuna Shipbreaking yard. He fell from a great height when he was breaking the Hanjin Rome, which was the first vessel arrested after the collapse of one of the largest container ship companies last year – the Korean company Hanjin Shipping. The Hanjin Rome was put up for auction by the High Court in Singapore to be sold to the highest bidder early this year.
Alliance Reshuffle Could Limit Freight Forwarding Options
iContainers, the 100 percent online freight forwarder, says that the new shipping alliances set to come into effect next week will lead to a shortage of options for freight forwarders. Starting April 1st, the previous four alliances will be regrouped to three - THE Alliance, OCEAN Alliance and 2M. According to iContainers’ co-founder Carlos Hernández, the effect of this new reshuffle is a reduction of shipping options. Already, the industry has been left one player short, following the collapse of South Korean liner Hanjin Shipping.
SM Group Mulls More Takeovers
South Korea’s Samra Midas Group (SM Group) said that it is looking to acquire some overseas shippers, among other businesses in an effort to expand its foothold in the maritime sector, Yonhap News Agency cited one of the company’s officials. SM Group, which was picked as the preferred bidder for STX Corp., a general trading company, last week, also purchased the now-defunct Hanjin Shipping Co.'s U.S.-Asia route and other assets for 37 billion won (US$32 million) late last year. SM Group plans to pour 130 billion won ($115 million) into STX.
SM Line Launches New Shipping Services
South Korea's new container carrier, SM Line, which is built mainly on the remains of collapsed Hanjin Shipping, plans to kick off operations with as many as nine routes this year. According to Yonhap, it will begin its services to Thailand, Vietnam, Japan and other regions with a fleet of 12 container ships. The carrier then wants to grow to 41 ships on 25 routes over the next five years. Late last year, SM Group, which owns South Korea's No. 2 bulk carrier Korea Line Corp., acquired now-defunct Hanjin Shipping Co.'s U.S.-Asia route and other assets for 37 billion won (US$32 million).
Consolidation Not Enough to Save Box Shippers -Study
The outlook for global container carriers remains rocky at the outset of 2017, according to a new study by AlixPartners. Hanjin Shipping Co.’s bankruptcy in 2016 sent shock waves through the industry, while Brexit and the new U.S. administration’s policies threaten to inject further uncertainty into the future of global trade. These stances could reverse policies that have supported the growth of containerization since the 1950s. Going into the important pricing season, companies need to do everything they can to retain the higher rates recently seen.
Marine Freight Industry to Reach $210 Bln by 2021 -Report
The global marine freight industry has struggled in recent years, suffering from a negative compound annual growth rate (CAGR) of 3.3 percent between 2012 and 2016 amid an increasing oversupply and a collapse of global demand, according to research firm MarketLine. The company’s latest report states that economic growth slowed across most of the world over this period, particularly in China, which has recently been the source of much consumer demand. This resulted in a fall in demand for transportation services in general…
Asian Ship Owners Meet in Japan
Held in Fukuoka, Japan, on March 19, 2017, the 29th Interim Meeting of the Asian Shipowners’ Association (ASA) Shipping Economics Review Committee (SERC)was attended by 21 delegates from ASA member associations of ASEAN, China, Chinese Taipei, Hong Kong, Japan and Korea. The U.S. economy is expected to pick up slightly this year, considering that manufacturing and investment will gain traction after a weak 2016. On the other hand, there is concern about how future economic policy and other policy initiatives under the Trump administration might affect not only the U.S.