HMM deploys more vessels in Europe to ease Red Sea shipping crisis

HMM's Blessing 11,000 TEU containership [HMM]

HMM, Korea's largest shipping company, will deploy four temporary vessels on its European and Mediterranean routes in response to the Red Sea shipping crisis fueled by ongoing attacks from Houthi militia in Yemen.

The attacks have resulted in heightened maritime freight costs and delivery times between Asia and Europe.

"The round trip sailing days have exceeded more than 14 days, intensifying challenges for domestic companies exporting to Europe," said the company. "In anticipation of a potential exacerbation of the vessel shortage toward Europe after mid-January, we've opted to deploy temporary vessels on the European and Mediterranean routes."

Upcoming developments include the departure of an 11,000 TEU (twenty-foot equivalent unit) container ship from Busan on Jan. 18 for the Northern European route. Additionally, for the Mediterranean route, three container ships ranging from 4,000 to 6,000 TEU are scheduled to depart from Busan on Jan. 15, 29 and Feb. 4.

The Red Sea shipping crisis has intensified pressure on exporting companies as shipping firms introduce surcharges, citing route diversions.

France's CMA-CGM, the third-largest global shipping company, recently announced a fare adjustment for the Asia-Europe route (FAK), raising it to $3,200 from the previous $1,600 for a 20-foot container starting Jan. 15. Similarly, Switzerland's MSC, the world's top shipping company, is hiking FAK freight rates to a range between $5,000 and $5,150 per 20-foot container, also effective Jan. 15.

HMM also informed customers of its flexible pricing adjustments on its European route, though it refrained from specifying the exact amount.

The Shanghai Containerized Freight Index (SCFI), which reflects global container freight rate trends, has reached 1,897 per TEU as of last week, marking a 7.8 percent increase compared to the previous week and the highest level recorded since September 2022. Strain is further added by navigation restrictions through the Panama Canal on the Asia-North America route, linked to drought conditions.

These developments have been mirrored in the shipping stock market. HMM's shares, which were around 13,000 won ($9.80) in October last year, have seen a significant surge since December, closing at 19,080 won on Wednesday.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]