Modern merchant ship accession 2M pass through three years of strategic cooperation to stay a chance

  • Date: Dec 14, 2016
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The failure of modern merchant ships.

December 12, 2M Alliance members Maersk Line and Mediterranean Shipping announced a day after a strategic cooperation agreement with Hyundai Merchant Shipping, the three parties decided to exchange space, accommodation and 2M to take over two part of the modern merchant ship leasing business way Cooperation, modern merchant ship is no longer involved in the 2M ship sharing agreement.

Although the day before the final settlement, the South Korean financial regulators are still in the release of the message, said the modern merchant is expected to catch up in the year to join the 2M alliance agreement.

Chinese Academy of Social Sciences Institute of International Law expert Zhang Wenguang December 13, told reporters that the modern merchant ship finally joined the League defeat, under the influence of many factors. After the Hanjin incident, the focus of the market to the safety of cargo transport, national authorities are also strengthening the supervision of the Union, and in competition for Hanjin empty market and assets, the performance of modern merchant ships far less than expected.

“In the face of the present mode of cooperation, modern merchant ship actually have no choice.”, By selling assets to repay debt, modern merchant ship book this year, the number has improved, but its operating losses continue.

The signing of the strategic cooperation for a period of three years, for the future of the modern merchant formally joined the left a chance – through space exchange and accommodation agreement, the modern merchant ship is still access to the 2M route network, part of the leased ship to 2M Two members, the financial situation will be improved. However, whether the final line, will largely depend on the next five years the development of modern merchant ships.

Owner against, missed Hanjin bonus

A statement from Maersk shows that after the approval of the regulation, the strategic cooperation agreement reached by the three parties is scheduled to start operation in April next year, and the current cooperation time is three years. This period is much shorter than the 5-year period of cooperation between the Alliance and THE Alliance, and the 2-year 10-year period is a huge gap.

The story changed only five months. Facing more than $ 4 billion in debt, Hyundai’s merchant fleet has been active this year, hoping to join the shipping alliance to meet creditor-approved restructuring plans to avoid being taken over by the courts.

In July this year, the modern merchant successfully signed a Memorandum of Understanding with Maersk, the Mediterranean, and plans to join the 2M alliance in April next year, the latter being the largest existing consortium.

Ocean Alliance and THE Alliance has announced that put into operation next year, when the market in the trans-Pacific routes 2M will lag behind the two competitors, the addition of modern merchant ships will be able to make up a certain gap. As for the modern merchant ship, joining the route network covering a wide range of 2M, will help reduce its operating pressure.

However, the trade daily (JOC) and many other media last month, the news, due to concerns about the financial status of modern merchant, 2M shippers do not accept the full membership of the modern merchant. Maersk Line also issued a statement soon to confirm the tripartite decision to seek other forms of cooperation.

And formal accession compared to the modern merchant and 2M cooperation is still a certain gap – although the three parties decided to expand trading and accommodation swap, ship sharing is not within the content of cooperation.

“If it is formally joined the Union, the modern merchant must have a minimum capacity of the commitment, but for the present modern merchant is still a great challenge.” Zhang Wenguang introduction, in addition to become a full member, facing the regulatory approval is also different .

8 at the end of the Hanjin incident is the modern merchant ship failed to join the important background. Zhang Wenguang analysis, Hanjin incident, the market value from the focus on transport to pay more attention to transport safety, because customers refused to let goods loaded on the modern merchant ship, the existing two members also lack the formal acceptance of the reasons.

And in Hanjin out of the market, the modern merchant did not seize the opportunity to strengthen the market position. From September this year, COSCO Shipping, Evergreen Marine, Yangming Shipping, Maersk Line, etc. have increased the routes between Asia and North America to seize the market vacated by Hanjin, the market share of a few percentage points of growth. However, the share of the modern merchant market in the same market almost no growth.

Alphaliner data show that as of December 13, Hyundai Merchant Marine has a 2.2% share of the global consignment market, and the end of August out of the market before the Hanjin data compared to no change in market share.

Even more surprising is that modern assets in the Hanjin bid war also defeated. The large-scale Korean shipping company unexpectedly purchased Hanjin’s routes, ships and terminals last month, including Hanjin’s most critical American-Asia network assets.

, The loss of Hanjin’s core assets and empty market share, the importance of modern merchant for the 2M has declined.

Join the League and then wait three years?

Depending on their own strength

The face of Maersk shipping and Mediterranean shipping, modern merchant ship naturally exist scale gap. As of December 13, Maersk and Mediterranean shipping capacity of 3.277 million TEU and 2.822 million TEU, respectively, accounted for 15.8% of the market and 13.6% market share, while the modern merchant shipping capacity of only 455,000 TEU.

However, as the only remaining global carrier Korea, Hyundai is still behind the support of the Korean government. In the final agreement before the signing of 11, one of the creditors of the Korea Development Bank has revealed that it will provide a number of funds to solve part of the modern merchant convertible bonds, in order to appease the outside world of their debt concerns.

The outside world generally believe that South Korean government support and the Korean customer resources behind, 2M and modern merchant ship to achieve “semi-coalition cooperation” of the main reasons. In particular, Maersk and the Mediterranean decided to take over the leasing assets of Hyundai Merchant Marine, and will have the opportunity to improve the financial position of the latter.

From the standpoint of the parties, the existing mode of cooperation for the future of modern merchant ships to join the formal negotiations left room. Maersk provided tripartite statement shows that cooperation agreement after the expiration of the cooperation may be extended, the scope of cooperation may also further cover the east-west route to the main. Yoo Chang-Keun, CEO of Hyundai Merchant Shipping Co., said on the 12th that the current strategic cooperation agreement is not different from the real alliance.

However, three years after the modern merchant can join, will depend on the overall strength of modern merchant ships and regulatory environment.

On the same day that the deal was signed on 11 November, Hyundai has announced that it will seek to increase its market share to 5 percent by 2021, but this is not an easy target.

At the end of August Hanjin announced bankruptcy protection, Hanjin Shipping market share accounted for 3.4%, modern merchant share of 2.2%. This is equivalent to the next five years, not only to keep the modern merchant market position of their own, but also for the recycling of a Hanjin.

This year, a series of mergers and acquisitions, the liner shipping market concentration increased significantly, the national regulatory authorities for the shipping Union’s regulatory efforts to significantly strengthen. The Alliance is also under scrutiny after a one-vote approval by the US Maritime Commission.

“As the market enters a three – pronged stage, the regulation of shipping alliances will become the focus of all countries, and shipping companies need to make more commitments to remove the concerns of regulators.

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