News / HMM unveils $11.3bn fleet investment plan

Invest to survive is the message from HMM’s CEO, Kim Kyung-bae, after announcing that South Korea’s flagship carrier will invest more than $11.3bn in the next five years to expand its fleet and shift to eco-friendly fuels.

By 2026, HMM aims to grow its container shipping fleet to 1.2m teu, from the present size of 820,000 teu, and will also expand its dry bulk fleet to 55 ships, from 29 vessels currently.

While container freight rates have been at historically high levels, the dry bulk market has also been healthy, and Mr Kim said it is necessary to balance out the business development of both segments.

Mr Kim added that these ships will be built to operate on clean fuels to comply with the International Maritime Organization’s ambition of reducing carbon emissions.

The CEO cited a rapidly changing business environment, increasing emphasis on environmental sustainability and technological advancements as justifications for the investment.

“The business environment such as environmental regulations and digital transformation is rapidly changing along with the uncertainty of the global shipping market,” he said.

“As a global shipping and logistics company, the purpose is to continue to survive and grow in the future. If you don’t invest, you can’t survive the future.”

To this end, HMM will form a task force on environment, social and governance (ESG) management to achieve sustainable growth.

HMM is also upgrading its IT systems that link artificial intelligence (AI) freight solutions to inland transportation, and recently developed a digital cargo booking platform, ‘Hi Quote’, through its own technology, and is planning to establish a department dedicated to digital acceleration.

Mr Kim added that HMM plans to strengthen its profit base by securing logistics infrastructure such as container terminals and create additional shipping routes, something that had been mentioned as far back as 2020.

Asked about speculation that HMM could be sold off, a matter fuelled by rival SM Line’s increasing purchases of HMM’s stocks, Mr Kim, who took over as CEO in March, responded: “We haven’t yet discussed the timing or divestment method with the major shareholders.

“Regarding minority shareholders’ growing dissatisfaction due to the recent decline in HMM’s stock price, the stock price isn’t as good as expected, but I think it’s different from business issues.

“If you create a strong and healthy company, the fundamentals will improve, and shareholder value will also increase,” he said.