(Photo 2) HMM Oslo (002)

Ahead of privatisation, South Korean ocean carrier HMM will continue a former THE Alliance transpacific loop that has strong connections to its home nation as a standalone service.

THEA dropped the Asia to US west coast PS8 loop as part of its annual network revision this month, but HMM will operate the service itself, albeit with Japanese carrier ONE purchasing slots.

Alphaliner said the PS8 THEA loop would end on 15 May and, thereafter, HMM’s standalone loop would be rebranded the Pacific South Express, or PSX, deploying six 8,500 teu to 11,000 teu vessels between Shanghai, Kwangyang, Busan and Incheon in South Korea and Long Beach and Oakland on the US west coast.

HMM was already the sole vessel provider on the PS8 and clearly the commercial value of the South Korean port connections to the US west coast by the flagship carrier encouraged it to maintain the service after it was dropped by THEA.

Indeed, with its privatisation now gaining traction following the appointment of investment banker Samsung Securities, tasked to find a buyer for the government’s 45% stake, HMM is looking to gain global market share – evidenced by its 8% increase in liftings in the final quarter of 2022, while its peers reported declining volumes during the period.

The eighth-ranked carrier also has a significant orderbook, equivalent to a third of its current fleet capacity of some 810,000 teu, so, notwithstanding its THEA partnership, HMM could be looking at further slot charter agreements with other carriers, or more standalone services in order to utilise this capacity.

In terms of normal THEA pooling arrangements, Hapag-Lloyd is the lead line, accounting for 40%, followed by ONE at 36%, Yang Ming at 15% and HMM, the smallest and newest VSA partner, with a 9% allocation.

It is unclear whether these allocations applied to the now defunct THEA PS8 loop, especially as HMM was the only vessel provider, nevertheless, the carrier must be confident in its ability to replace the Hapag-Lloyd and Yang Ming cargo carried on the service.

However, HMM’s new slot charter agreement with ONE is substantial. The Japanese carrier has rebranded the service as its CP8 loop and, according to Alphaliner, has filed a new agreement with the US Federal Maritime Commission (FMC) reflecting the service being outside THEA.

“The carrier disclosed to the FMC it would now buy 2,977 teu of slots, for a maximum of 31,259 tons (whichever is reached first), per round voyage,” said Alphaliner.

Thereafter, HMM can sell ONE extra space on an ad-hoc basis, according to the filing.

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