Maersk Line, MSC, and HMM Enter Strategic Cooperation - Global Trade Magazine
  December 22nd, 2016 | Written by

Maersk Line, MSC, and HMM Enter Strategic Cooperation

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  • There once was a plan for Hyundai Merchant Marine to the 2M Alliance.
  • The Hanjin bankruptcy took 2M alliance talks off the table.
  • HMM is left an orphan carrier, a major container line not part of an alliance.

At one time, there was a plan for Hyundai Merchant Marine to join Maersk Line and Mediterranean Shipping Company (MSC) in the 2M Alliance.

A lot has happened since then, most notably the Hanjin bankruptcy, and the alliance negotiations were taken off the table. Hyundai has been experiencing its own financial difficulties of late.

That left Hyundai an orphan carrier, a major container line that is not part of one of the three big alliances, 2M, Ocean Alliance, and THE Alliance. The latter two will commence operations in April 2017.

But all is not lost for HMM, as the 2M carriers announced that they would enter a new strategic cooperation with the South Korean carriers which will include slot exchanges and slot purchases between the three parties. Maersk Line and MSC will also be taking over a number of charters and operations of vessels currently chartered to HMM.

The arrangement is meant to be a middle ground between membership in the 2M Alliance and HMM’s potential lack of affiliation. “The cooperation is outside the scope of MSC and Maersk Line’s 2M vessel sharing agreement,” a statement from Maersk Line noted. “However, it will provide HMM access to the 2M network. For Maersk Line the cooperation will provide new opportunities, not least in the transpacific trade where 2M gets access to strong HMM products.”

A report from the Dow Jones new service attributed the suspension of alliance talks between 2M and HMM to “customer backlash.” “A senior executive with the 2M alliance…said customers balked at the inclusion of a Korean carrier after the August collapse of Hanjin Shipping Co.,” the report stated. The anonymous executive was further quoted as sayng that “at this point going to bed with Hyundai could shake customer confidence…”

The agreement is scheduled to begin in April 2017 subject to regulatory approval. The initial term of the cooperation is three years with option to extend and covers key east-west trades. The parties expect to disclose more information about network changes and schedules in early 2017.