Hyundai Forming Mini Alliance to Cover for Hanjin Shipping
Hyundai Merchant Marine will be forming a vessel-sharing alliance with three South Korean mid-sized container carriers to fill in for missing Hanjin Shipping capacity, according to a report in by a South Korean news agency.
Hanjin Shipping entered receivership on August 31 after it couldn’t convince its creditors to back a plan to manage its $5 billion of debt.
Hyundai, South Korea’s second largest container carrier will enter the new partnership, called Mini Alliance, with Korea Marine Transport, Sinokor Merchant Marine, and Heung-A Shipping.
Hyandai is reportedly in the process of acquiring Hanjin’s key assets. HMM itself only recently escaped receivership until it convinced ship owners to reduce charter rates and complied with other conditionss demandd by its creditors.
The alliance plans to deploy 15 vessels on four Southeast Asian routes starting towards the end of September in an effort to mitigate the disruptions caused by Hanjin’s halting of operations. The routes cover Singapore, Malaysia, Indonesia, Vietnam and Thailand from South Korean port.
An estimated $14 billion in cargo is stranded at sea in the wake of the Hanjin bankruptcy because ports won’t let Hanjin vessels dock and offload cargo.
“The decision was made in order to minimize losses of the shippers on the Southeast Asian route due to Hanjin Shipping fallout and to compete with global shipping lines,” an official of HMM was quoted as saying.
HMM is planing on adding one 5,000-TEU container ship, one 2,800-TEU, two 2,200-TEU and 1,700 TEU vessels to the routes later this month.