Soft demand and falling rates push 2M to blank another Asia-USEC sailing
2M partners Maersk Line and MSC have announced plans to blank sailings between Asia and ...
Hyundai Merchant Marine (HMM) is set to launch a new Asia-North Europe loop in April independent of its slot charter and slot and swap agreement with the 2M alliance, despite the cooperation deal having over two years still to run.
According to an industry source the first sailing of HMM’s new Asia-Europe Express (AEX) will be on 9 April with the service deploying panamax containerships of around 5,000 teu capacity.
HMM aims to fill its standalone vessels with higher paying time-sensitive cargo and is believed to have tapped into South Korea’s giant electrical manufacturers for their support.
Currently transit times from say Shanghai to Rotterdam on a 2M loop can be up to 40 days for an HMM customer, with the average being over 30 days.
At the time of writing HMM had not revealed full details of the itinerary and hub ports of the AEX service.
In December 2016, HMM announced that it had signed a ‘strategic cooperation agreement’ with 2M partners Maersk Line and MSC, commencing in April 2017 with a three-year initial term of cooperation.
HMM said at the time: “We have agreed to an initial three-year term with the 2M, which is shorter than the general period of alliance contracts. This is because a long-term contract may prevent us from growing into a global carrier under limited circumstances including the restriction of new vessel orders.”
The deal for east-west trades involved a slot purchase agreement on 2M vessels between Asia and Europe and a combination of slot exchange and slot purchase on the transpacific trade, where HMM operated its own vessels.
However, Maersk Line and MSC transpacific shippers were angered at the prospect of their cargo potentially being loaded to an HMM-operated vessel and the 2M partners were obliged to give assurances to customers.
In a customer advisory Maersk Line said: “2M cargo will only be loaded onto HMM-operated vessels with customers’ express agreement, and only on the HMM-operated service that is part of the Asia to US west coast slot swap agreement.”
In the wake of the supply chain chaos following Hanjin Shipping’s bankruptcy in August 2016 shippers have become increasingly concerned that there could be another industry casualty.
Indeed, THE Alliance was the first, and so far the only VSA grouping, to incorporate wording into its agreement to have a funding mechanism in place in the event of a bankruptcy of a member, and furthermore for the remaining parties to be allowed to facilitate the movement of cargo carried by the failed container line partner.
Another aspect of the cooperation with the 2M saw Maersk Line and MSC take over the long-term charter liability of five 13,100 teu ships owned by Danaos, which the partners then deployed between Asia and Europe.
Joining an alliance was one of the conditions of a debt restructuring deal struck between HMM and its creditors in May 2016, after the carrier had been excluded from the G6 alliance transition to THE Alliance due to its parlous financial position.
Notwithstanding suffering a $1.1bn net loss last year, HMM said it plans to spend $95m on a fleet of new containers and is reported to be on the brink of confirming an order with a South Korean shipyard for 12 22,000 teu vessels and eight 13,000 teu ships.
The 22,000 teu ULCVs could only be viably deployed on the Asia-North Europe trade.