SOUTH Korea's Hyundai Merchant Marine (HMM) will join THE Alliance in 2020, breaking away from the 2M shipping alliance of Maersk Line and Mediterranean Shipping Company (MSC). The move will give THE Alliance far greater market share in terms of container shipping capacity.
THE Alliance members of Hapag-Lloyd, Ocean Network Express and Yang Ming Marine Transport currently have an 11 per cent market share in terms of TEU, ranking the grouping third among the world's leading shipping alliances, after 2M and Ocean Alliance which have 20.8 per cent and 19.3 per cent respectively, reported London's Riviera Maritime Media.
It quoted VesselsValue analyst Zheng Yang Cheng as saying: "Even though HMM only controls 0.7 per cent of the container market today, things will be markedly different with the delivery of 12 x 23,000-TEU ULCSs (ultra large containerships) in 2020 and eight 15,300-TEU ULCSs in 2021.
"This will propel the market share of THE Alliance from 11 per cent to 14.5 per cent, much closer to its rivals 2M and Ocean Alliance which will have 17.3 per cent and 19.8 per cent respectively in 2022.
"Having these large ULCSs also allows THE Alliance to seek out further opportunities in the Far East-North Europe trade whenever additional demand is required. This allows the other members of THE Alliance to focus on running their operations without worrying about having to place additional newbuild orders."
However, Mr Cheng warns: "Having additional capacity comes with associated risk. Amid the trade war between US and China, shippers are pessimistic with demand growth going forward. Filling the ULCSs would pose a challenge while the trade war continues."
He noted that newbuild orders have already fallen 54 per cent year on year, from 545,000 TEU in the first half of 2018 to 252,000 TEU in the first six months of this year.