News / HMM eyes developing markets and specialised cargo to retrieve profitability

Credit HMM

Uncertainty over long-haul container routes could see HMM deploy more ships to emerging markets, such as South America, the Indian subcontinent and Middle East, as well as intra-Asia.

Yesterday, South Korea’s flagship carrier announced that, between January and September, revenue dipped 4%, to KRW8.18trn ($5.83bn), and net profit fell 48%, to KRW1.52 trn ($1.08bn).

This, it said, reflected the collapse in freight rates after front-loading ahead of the implementation of US tariffs on global imports.

And HMM said market conditions were expected to remain weak in Q4, due to the traditional year-end slack season, despite the US and China pausing their mutual protectionist moves against each other.

The carrier said it would react by adjusting port calls and vessel deployment across tradelanes and explore new routes to improve profitability.

Its spokesperson told The Loadstar: “Regarding port calls and tradelanes, we haven’t finalised the specifics of our route or vessel deployment plans yet. Our main focus is on responding to market fluctuations to boost profitability.”

However, Linerlytica analyst Tan Hua Joo suggested HMM had concentrated too much on long-haul lanes.

He said: “HMM is over-exposed to the transpacific and Asia-Europe trades; it has a market share of 5% in both markets and would be seeking to grow in the Latin America and India/Middle East routes where its current market share stands at 2% and 3%.

“It is also under-exposed in the intra-Asia routes, where it has a market share of just 1%.”

HMM also mentioned yesterday that it planned to target high-yield cargo segments such as reefers, out-of-gauge shipments and other special cargo. Refrigerated cargo commands higher freight rates as this is usually high-value and perishable.

The spokesperson explained: “As for out-of-gauge shipments, our current emphasis is on containerised cargo. However, as part of our 2030 mid-to-long-term plan, we are looking to expand our fleet by introducing a variety of vessel types.”