Update: April 25, 2019:
Maersk has provided the following comment: "We are happy with the partnership with HMM through 2M and are looking forward to reviewing options for extending the cooperation in due course," a Maersk spokesperson told Supply Chain Dive in an email. "The current agreement runs until April 2020 and at this stage it is too early to engage in any discussions about the future and the potential extension of the agreement."
Dive Brief:
- HMM CEO Jae-hoon Bae is meeting with executives from MSC and Maersk in an attempt to "consolidate the relationship" the shipping companies currently have in the form of an agreement of strategic cooperation, HMM said in a press release.
- HMM is looking to become a full member of the 2M alliance by next year, an anonymous source told The Wall Street Journal. MSC declined to comment and Maersk did not respond to a request to comment.
- "Mr. Bae departed for London, UK on April 22 to strengthen business relationship with not only major customers in Europe but global top rated carriers," HMM said in a press release.
Dive Insight:
HMM began its current agreement with 2M in 2017 when the "2M+H Strategic Cooperation" took effect.
The agreement allows HMM to exchange slots with 2M members on some trade routes. Just months before this agreement was signed, HMM was considered a financial risk. HMM's creditor pushed the shipping company to join an alliance.
Since then, the company has taken steps to try and improve its financial position. In 2017, it sold 10 container ships worth $739 million to the Korea Shipping Company and received even more funding from the Korea Shipping and Marine Fund.
Maersk and MSC represent the largest and second-largest ocean shipping companies in the world moving 18% and 14.8% of the global container volume, respectively. HMM doesn't bring as much heft to the negotiating table as the ninth largest carrier with 1.9% of global volume, according to Alphaliner.
HMM does benefit from the current agreement by being able to get its cargo onto 2M ships when necessary. Full membership would be a big step for the company as it would give it more of a say in the alliance.
HMM's current agreement with 2M expires next April. The shipping line has already been rejected from the Ocean and THE alliances, according to The Loadstar. This means the push to get into the 2M alliance could be the last chance the carrier has to join an alliance before new International Maritime Organization (IMO) sulfur regulations take effect in 2020 — expected to impose a new financial burden on ocean carriers, which will have to buy more expensive fuel or retrofit ships to comply.
Bae is also planning to meet with IMO Secretary General Ki-tack Lim "to share opinions and views on the IMO 2020 environmental regulation and upcoming regulatory measure on CO2 emissions," according to the same release.
