News / HMM calls on staff to take early retirement as it eyes costs

HMM Algeciras: Source HMM

South Korean flagship carrier HMM is inviting applications from its workers to take early retirement, amid speculation the company is pre-emptively cutting costs as container freight rates weaken.

Targeting employees in their 50s, the scheme offers a payout of at least two years’ salary, along with support for re-employment and entrepreneurship.

A HMM spokesperson told The Loadstar “the scheme was “aimed at facilitating organisational circulation and secure capacity for new recruitment” and was “unrelated to container market conditions”.

The last time HMM carried out voluntary retirement was in 2022, when around 30 staff applied.

“Early retirement”, a euphemism for retrenchment, was used by Japanese corporations during the 1997 Asian financial crisis, when businesses could no longer sustain the long-held “job for life” practice.

While stock analysts expect HMM to remain profitable – due to its diversified portfolio that includes dry bulk and tankers – companies often execute pre-emptive layoffs in anticipation of challenging environments.

On 30 January, the Shanghai Container Freight Index closed at 1,316.75 points, down 30% from a peak of 2,000 points a year ago. Newbuilding deliveries this year are expected to total 10m teu, triggering oversupply concerns.

Despite HMM’s insistence that its manpower shake-up is unrelated to market conditions, Maersk, which today also announced poor results for its shipping operations, is implementing a $180m cost-cutting programme. Around 1,000 of 6,000 corporate roles will be made redundant.

Container shipping consultancy Linerlytica said this week the liner party could be over this year.

For Q4 25, ONE reported an operating loss of $84m and a net loss of $88m, Maersk has reported negative EBIT of $153m for its shipping business, andHapag-Lloyd is expected to report negative operating profit figures this month.

Ten of the top 12 carriers have paid more than $160bn to their shareholders since 2020 through dividends and share buybacks, but the cash will soon dry up as the container shipping super-cycle comes to an end.

Freight rates have continued to slip ahead of the Chinese New Year holiday this month, and carriers’ ability to halt the rate slump will continue to be tested in the coming months.

Linerlytica said: “Although global teu-mile demand remains resilient, and currently stands at 6.5% above last year’s levels, there are doubts over the sustainability of cargo growth outside of the US, as well as the continuation of vessel diversions from the Red Sea and elevated port congestion.”