South Korean shipping line SM Line is lining up its newly acquired shipping capacity for entry onto the Asia/US West Coast trade during March. Reports from South Korea confirm that SM will deploy 12 ex-Hanjin vessels, acquired by its parent, SM Group, from the fleet of the bankrupt shipping line Hanjin during the latter months of 2016.

SM Group is not only concentrating its growth potential on the seagoing side, but also on its human resources side.

In addition to the vessels acquired from Hanjin, 251 shoreside and seagoing staff will also assume individual roles with SM Line. Office staff will be based either in South Korea or in the United States, on the West Coast.

The ex-Hanjin ships acquired by SM Group comprise vessels in the 4,000-7,000 TEU capacity range. SM will most likely continue existing charter agreements on those vessels.

Sources in South Korea indicate that the vessels will join existing services and/or alliance agreements, with the view to becoming operational before April, a month which will see major alliance structural changes undertaken on the main east/west trade routes.

“The formation of new alliance undertakings is expected to witness SM joining a new alliance undertaking, and would seem the more obvious path to take than proceeding down the go-it-alone approach with 12 of its own vessels,” a source tells Asia Cargo News.

In addition to SM Group taking on ex-Hanjin vessels and extra staff, Hyundai Merchant Marine is to, with immediate effect, employ 131 of Hanjin’s seagoing and shoreside workforce.

In a further step, HMM will also recruit 41 additional ex-Hanjin employees, including offshore staff, during February 2017, a move that will push up the total ex-Hanjin workforce employment number to 172. HMM also has plans to rehire a maximum of 40 to 50 of Hanjin’s offshore staff to fit in with plans by HMM to expand its fleet of new and secondhand vessels.

At the end of this present expansion programme, HMM’s workforce will have increased by more than 220.

HMM, together with fellow South Korean lines Sinokor and Heung-A, have recently confirmed plans to sign a memorandum of understanding (MOU) to form a new intra-Asia trade consortium under the name of the HMM + K2 consortium.

The MOU, which will cover the China, Japan and Southeast and Southwest Asia trades, is expected to be signed in February, and become fully operational in March.

An undertaking to automatically renew the agreement every two years has been agreed, unless any of the lines have a “problem” with procedure.

As a result of the new consortium, HMM will acquire full access to the Heung-A and Sinokor service networks, which particularly focus on the South Korea-Japan and South Korea-China trades.

Importantly, the HMM + K2 consortium will include vessel sharing, slot exchange and slot purchase agreements, as well as additional plans to bring in joint investment in port infrastructure, and medium- and long-term sharing of container equipment.

The Heung-A fleet presently consists of 24 vessels in the 1,000-2,700 TEU capacity range, while the Sinokor fleet consists of 11 vessels in the 1,100-2,800 TEU capacity range.

Future service commitment from the lines will concentrate on developing countries, including Vietnam and Indonesia.

Asia Cargo News