Hyundai Joining 2M Alliance

By Mark Edward Nero

Hyundai Merchant Marine (HMM) announced July 14 that it has signed an agreement with the 2M Vessel Sharing Agreement (2M VSA) for providing joint service in the trans-pacific area beginning in April 2017.

The announcement comes following agreements with bondholders to adjust debt and shipowners to adjust charter-hire. The agreement is contingent upon finalizing negotiations and approval procedures in each country.

The 2M is a leading container shipping alliance comprised of the world’s two largest container carriers, Maersk Line (ML) and Mediterranean Shipping Co. (MSC). HMM is South Korea’s second-largest ocean carrier.

The agreement signed between HMM and the 2M carriers is binding in regards to HMM’s entry to the 2M VSA. By accessing 2M VSA network, HMM has said it would be able to strengthen its service offering and improve cost competitiveness.

Likewise, the 2M carriers say they would benefit from a reinforced service competency in Asia and improved network cover in the trans-pacific area.

“Based on the company’s sound financial structure, HMM will put its utmost efforts into improving our service offering to clients and to continue increasing operational competency in the second half of this year to continue improving profitability of our company” Hyundai Merchant Marine said in a prepared statement.

2M Alliance Wins US Approval

By Mark Edward Nero

The Federal Maritime Commission on Oct. 8 approved the formation of a new vessel sharing agreement between Maersk Line and Mediterranean Shipping Co., dubbed the 2M Alliance by the two shipping companies.

The FMC’s approval – Richard Lidinsky Jr. cast the sole vote against the deal – means the last major hurdle has been cleared for the alliance’s formation; China and the European Union previously approved the deal.

Maersk and MSC announced July 10 that they’d signed a 10-year vessel sharing agreement on Asia-Europe, Transatlantic and Transpacific trades, including the West Coast of North America.

The shippers say the agreement includes 185 vessels with an estimated capacity of 2.1 million TEU. Maersk Line is to contribute 110 vessels with a nominal capacity of about 1.2 million TEUs, or 55 percent of total capacity, while MSC contributes 75 vessels with a nominal capacity of almost a million TEUs, or 45 percent of total capacity.

The shipping lines say that with the agreement in place, they’ll be able to provide their customers with more stable and frequent services and cover more ports with direct services as well as improve the efficiency of the companies’ networks through better utilization of vessel capacity and economies of scale.

Earlier this year, the two carriers, which control 28 percent of the global container shipping market, were previously involved in the failed P3 Alliance of shippers. The alliance received approvals from US and European officials, but fell apart after the Chinese Ministry announced its disapproval June 17 following an anti-monopoly investigation.

The 2M Alliance partners say they expect to begin joint operations in January.