HMM Co., South Korea’s largest ocean carrier, said on Tuesday it will spend 23.5 trillion won ($17.5 billion) by 2030 to nearly double its cargo capacity and expand integrated logistics services to become a leading logistics company.
Its CEO Kim Kyung-bae said in a news conference that the company aims to expand its load capacity to 1.55 twenty-foot equivalent units (TEU) by 2030 from the current 92 TEU.
One TEU equals one 20-feet container. The 92 TEU is the maximum cargo volume of 84 container carriers.
For bulk cargo services, it will increase the load capacity of its fleet of bulk ships from the current 6.34 million deadweight tonnage (DWT) to 12.56 million DWT by 2030. DWT is a measure of the weight a ship can carry.
To meet the goals, it will expand the fleet of its bulk carriers to 110 units by 2030 from the current 36 ships.
“We will achieve 15 trillion won in revenue by 2030 with assets of 43.2 trillion won and become a leading logistics company in South Korea,” Kim told reporters.
The revenue and asset targets are 82.9% and 68% higher than its 2023 achievements, respectively.
The breakdown of HMM’s 23.5-trillion-won spending plan (Unit: trillion won)
Container shipping
12.7
Bulk cargo
5.6
Integrated logistics services
4.2
Low emissions and service digitalization
1.0
PREMIER ALLIANCE
The detailed spending plan was unveiled after HMM recently formed a five-year strategic partnership, dubbed Premier Alliance, with Singapore-based Ocean Network Express (ONE) and Taiwan’s Yang Ming Marine Transportation, as an alternative to THE Alliance.
The three-way partnership will be launched in February 2025, when Germany’s Hapag-Lloyd is slated to exit from THE Alliance to join Maersk in the Gemini Cooperation.
They are two of the three key global liner alliance, including the Ocean Alliance, which features CMA CGM, Evergreen and COSCO.
On Monday, the Premier Alliance said that it has agreed on a slot exchange cooperation with Mediterranean Shipping Company (MSC), a leading shipping line headquartered in Switzerland, in the Asia-Europe trade, starting in February next year.
A container terminal in South Korea
The agreement comes as HMM is seeking to expand integrated logistics services, or end-to-end port container services. To do so, it will expand its cargo terminal facilities and secure additional container terminals at global logistics hubs, Kim said.
“Now the Premier Alliance has agreed to join hands with MSC, HMM will need to build competitiveness on routes other than Europe, such as the Atlantic, South America and Africa,” said a shipping industry official.
ZERO EMISSIONS
HMM will also bring forward the zero emission target to 2045 from 2050 by shifting toward low-carbon vessels.
Meanwhile, industry observers warned HMM’s financial goals could be vulnerable to its top shareholders’ privatization plan for the sea carrier.
The Korea Development Bank and the Korea Ocean Business Corp. had put their majority stake in HMM on the market.
But their attempt to sell it faltered after its preferred bidder Harim Co., a poultry processer, walked away from the deal worth $5 billion in February.
By Jin-Won Kim
Jin1@hankyung.com
Yeonhee Kim edited this article
