Dive Brief:
- Hyundai Merchant Marine (HMM) said Friday its Asia-US west coast (USWC) volume rose by 73% since the end of April 2016.
- PIERS Data noted that HMM’s Asia-USWC nearly doubled from 7,604 TEU per week to 13,186 TEU per week. As a result, HMM has grown from 11th in market share to 5th.
- The Korean line attributes its growth in market to its strategic cooperation agreement with 2M beginning April 1, 2017.
Dive Insight:
Near-bankruptcy experiences rarely benefit companies struggling in rough waters, but every once in a while, a bailout or restructuring proves beneficial to an industry. This was the case for General Motors when the Obama administration helped the company weather the most recent economic crisis, and at least according to the IMF, would be the case for South Korea's shipping industry.
Fortunately for HMM, the carrier has emerged as the country's de facto flag carrier after its major and much larger competitor was left to sink in its debt, and declare bankruptcy. After that event, HMM has benefited from an elevated international status amid partnership with the 2M Alliance, and a few of Hanjin's old assets. The company has purchased stakes in old Hanjin terminals in Long Beach, Algeciras, Tokyo and Kaoshing, to name a few.
The nearly doubled weekly volumes to the U.S. West Coast are therefore not surprising, but indicative of the highly competitive nature of large carriers in the shipping industry. Hanjin's assets were distributed among a wide variety of carriers, but it was largely the 2M Alliance that benefited. A carrier may fall, but as demand remains, competitors are ready and eager to take on new business.
