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As South Korean shipping line HMM today formally launched the world’s largest containership, the country’s government outlined an enormous financial package to prop up its maritime industries.
According to a report in The South Korea Herald, the ministry for oceans and fisheries has set aside SKw1.25trn (US$1bn) to help shipping lines, shipyards and other maritime players.
Minister Moon Seong-hyeok said: “The shipping firms are expected to suffer more serious damage after the second quarter, considering the time lapse between the global economic turmoil and the decline in their performances.”
The Herald additionally reports that the Korea Development Bank and state-owned Korea Ocean Business Corporation will also spend SKw470bn to repay HMM’s maturing debts.
The fresh injection of cash coincides with the launch of the 24,000 teu HMM Algeciras at the DSME shipyard in Okpo in a ceremony attended by President Moon Jae-in.
“It is very meaningful that HMM takes delivery of the most technologically advanced containership in this difficult time. I would like to celebrate it and hope that HMM continues to secure a competitive advantage as a Korean national flagship carrier,” he said.
The vessel is set to be phased into The Alliance’s FE4 Asia-North Europe service, currently operated by 12 14,500 teu Hapag-Lloyd vessels.
However, its first sailing could also be its last, at least for a while, as the demand slump in North Europe for containerised goods, due to the outbreak of the coronavirus pandemic, has led The Alliance partners to merge the FE4 and FE2 strings. FE2 is currently operated by 12 18,800-21,200 teu vessels from Hapag-Lloyd and ONE, according to eeSea data.
In terms of current capacity allocation on the FE2, eeSea estimates that Hapag-Lloyd takes 40% of slots, ONE 36%, Yang Ming 15% and HMM 9%.
However, the South Korean carrier is set to add significant capacity to the alliance over the next year, with an order dated September 2018 for 20 vessels from three shipyards – DSME, Hyundai Heavy Industries (HHI) and Samsung Heavy Industries (SHI).
DSME and SHI are building seven and five 24,000 teu box ships, respectively, scheduled for delivery through to September, while HHI is building eight 16,000 teu vessels to be delivered from the second quarter of next year.