New South Korean Container Company Launched
A South Korean construction company, Samra Midas (SM) Group, is entering the container shipping domain with the launch of SM Line.
The company made the announcement after it confirmed that SM Group would complete the acquisition of the bankrupt Hanjin Shipping’s Asia-to-US assets.
The shipping company plans to acquire 12 container ships in the first half of this year and start its liner business in March and to build its fleet to around 110,000 TEU. The shipping company is planning on acquiring 11 containerships of 6,500-TEU capacity and 10 smaller vessels of under 4,000 TEU.
SM Line would become the second largest container South Korean container carrier after Hyundai Merchant Marine Co. (HMM) with 455,000 TEU.
Another SM subsidiary, Korea Line, a dry bulk carrier, had intended to take over the Hanjin assets. That effort failed with the rejection of the idea by KLC shareholders who felt the carrier lacked sufficient experience to run a container shipping business.
SM Line announced that it intends to be joining a South Korean shipping alliance which includes the country’s largest cargo carrier, Hyundai Merchant Marine Co., and smaller local carriers running short-haul intra-Asia routes, according to local news reports. The group also plans to start a ship rental service by purchasing second-hand vessels.
The alliance, called HMM+ 2K brings together HMM, which operating under the supervision of its creditors, regional ship lines Sinokor Merchant Marine Co., and Heung-a Shipping Co. The alliance represents a first for its composition of regional, as opposd to global, carriers and plans to be involved in vessel sharing and investments in infrastructure.
Sinokor Merchant Marine has a cargo carrying capacity of 48,000 TEU while Heung-a Shipping has a total fleet capacity of 38,000 TEU.
In 2016, the three carriers handled 3.73 TEU on the intra-Asian routes. They expect an increase of 20 percent this year thanks to their operation in an alliance.