HMM to join THE Alliance consortium in April next yearHyundai Merchant Marine (HMM) is joining THE Alliance, one of three global ocean carrier consortiums, signaling a boost to the Korean shipping industry that has struggled in recent years.
The ocean carrier announced in a statement Monday that it is joining THE Alliance as a full member starting April 2020. The consortium, founded in 2016, welcomed HMM to its alliance after the Korean shipping line signed an agreement to be the fourth member in Taipei, Taiwan, last month, which was publicized after a number of official procedures until Monday. The other three members are Singapore’s ONE, Germany’s Hapag-Lloyd and Taiwan’s Yang Ming.
Joining a global consortium was one of the requirements that HMM’s creditors insisted upon as the former Hyundai Group affiliate was in need of reducing its debt. By joining the consortium, HMM can cut costs by sharing ships with other members until membership expires in March 2030.
The company was an affiliate of Hyundai Group until being forced to split into a separate entity in 2016 due to mounting debt following the 2008 global financial crisis.
Now that it has joined THE Alliance, HMM will leave the 2M alliance, which it is a partial member of, in March. HMM was originally looking to fully join the 2M alliance, but the group denied a spot for the Korean carrier due to HMM’s financial risks.
Analysts believe membership of THE Alliance will bring boost HMM’s revenue, starting late 2020.
“If the company was to be denied membership to THE Alliance, difficulties were expected in the company operating large-sized ships that it is scheduled to receive in the future,” said YS Jeong, an analyst at NH Investment & Securities, in a report.
“As the company is joining THE Alliance as a full member, such worries are resolved.”
BY KO JUN-TAE [email@example.com]