News / HMM to expand co-operation with FESCO with new services

© Sheila Fitzgerald

HMM president and CEO Jae-hoon Bae yesterday announced an expansion of the carrier’s cooperation with Russia’s FESCO, and provided details of its rationalised Asia-North Europe transpac pendulum service. 

The newly appointed chief executive of South Korea’s largest carrier was in London on a week-long fact-finding visit to North Europe to discuss HMM’s sales strategy, meet major customers and talk to 2M partners Maersk Line and MSC about extending cooperation of their agreement beyond April 2020. 

Next month, HMM and FESCO will launch two weekly direct services between Busan and Vladivostok (KRS and KRS2), each carrier deploying one 1,000-1,200 teu vessel on each service. 

They will supplement HMM and FESCO’s CRN (China, Russia North service) the partners currently operate in cooperation with CMA CGM. 

From 14 May, the rotation of the CRN service will be: Qingdao-Shanghai-Ningbo-Vladivostok. 

“Based on these three services, HMM will strengthen its market position in Russia,” said the carrier. 

Meanwhile, following the decision not to upsize its AEX Asia-North Europe standalone service, due to the softening of the market, Mr Bae explained to staff at HMM’s London European head office that, from next month, the service will be combined with one of the carrier’s transpacific loops into a pendulum operation. 

HMM launched its AEX loop independently of its slot charter arrangement with the 2M in April last year, calling at Rotterdam, Hamburg and Southampton, but it has faced reliability issues leading to a temporary suspension of the call at the UK hub port. 

The original motivation for HMM’s standalone loop came from its Korean electronics customers who complained they were unable to guarantee shipment on nominated 2M vessels. 

Indeed, one HMM source complained to The Loadstar that it was “always the last to know” about service disruptions on 2M vessels.

“It puts us in a very difficult position with our customers,” he added. 

According to Alphaliner, HMM intends to consolidate its AEX service with its transpacific PN2 loop deploying 15 panamax units of 4,700-5,400 teu, thus reducing the previous combined total by two vessels. 

“The new pendulum service will turn in 15 weeks, calling at Rotterdam, Hamburg, Southampton, Singapore, Yantian, Kaohsiung, Shanghai, Busan, Tacoma, Vancouver, Busan, Shanghai, Ningbo, Yantian, Singapore and Rotterdam,” said Alphaliner. 

The consultant noted that the combined AEX/PN2 service would no longer serve Hong Kong direct or offer a direct Kaohsiung-North Europe westbound connection. 

It added that Zim, which currently takes slots on the PN2 loop, would henceforth focus on its new cooperation arrangements with the 2M partners to cover their Asia-US west coast route requirements. 

Notwithstanding HMM’s pendulum rationalisation, the carrier has so far not elaborated on its plans to utilise its 12 newbuildings of 23,000 teu, due to be received next year. No doubt this and other matters will be on the Mr Bae’s agenda when he visits Maersk and MSC in Copenhagen and Geneva. 

The Loadstar has heard from a source in Busan that the delivery of the ULCVs could be postponed until 2021 if Mr Bae does not come back with a deal.