The Korean National Carrier Hyundai Merchant
Marine has placed major orders for 20
Eco friendly Mega Container Ships including 12 23000 TEU and eight 15,000 TEU
two months ago setting at rest speculations that the industry has not come out
the global recession gripping it for the past ten years
In September 2018, HMM has ordered 20
eco-friendly mega containerships, including 12 23,000-TEU and eight 15,000-TEU
vessels. With vessel deployment planned for 2020, HMM expects that fixed costs
will significantly decrease, fuel efficiency will largely improve.
Bunker costs will moderately decrease through
installed scrubber systems for compliance with IMO 2020 environmental regulations.
The timely deployment, along with cost competitiveness, is expected to attract
customers, partners and investors.
Cost competitiveness and mega containerships are
in line with the ĎCapacity of 1-million TEUí strategy that will play an
important role for HMM in obtaining economies of scale. This strategy will lead
to additional cost reduction.
Confident of filling up the mega containerships
HMM has largely recovered customer trust over the
past two years. Since its recent new shipbuilding orders, improved financial
stability and Korean public support, customer expectation and trust for HMMís
services have remarkably improved.
As a result, its vessel utilization levels and
volumes have significantly increased. In terms of average utilization level
(round trip), HMM achieved 75 per cent in 2016, which increased to 78 per cent
in the first half of 2018, and it expects over 80 per cent in the second half
of this year.
Also, HMMís cargo volume has dramatically
increased by 30 per cent, from 3 million TEUs in 2016 to 4 million TEUs in 2017
without fleet expansion, and it now expects 4.5 million TEUs in 2018.
Support and trust of its customers is evidenced
by HMM increasing its Far East-Europe service market share by over 50 per cent
through its newly introduced AEX service, which has continually recorded full
booking since its first sailing in April this year.
HMM has been in the container business for over
30 years since the mid-1980s. It operates 94 branch networks all over the globe
and conducts business with 7,000 regular customers per week. It sees 7 per cent
market share in East-West trades by 2021 as an achievable goal. Therefore, the
apprehension that it might have difficulties in filling up the mega
containerships is unwarranted, the release emphasized.
A remarkably improved financial structure
With the completion of the capital increase of
KRW 1 trillion through bond issuance last October, HMMís financial ratios,
including the debt ratio and cash flow, have significantly improved.
Further, it expects to improve its operating
profits, though it is not an easy target in the short term. It will explore
autonomous financing in the market if needed. HMM expects that its credit
rating will be restored and capital attraction will accelerate from the second
half of 2020 due to increasing operating profits plus investor and customer
confidence, the release said.