HMM will continue to provide extra container shipping capacity for South Korean small and medium enterprise (SME) exporters until the end of 2021.
South Korea’s largest liner operator signed an agreement with Korea SMEs and Startups Agency (KOSME) on 2 April, pledging to reserve slots for these exporters on all Asia-Europe and Transpacific services, to support their long-term transportation needs. HMM began providing an ‘extra loader’ Busan-Los Angeles service during the peak season in August 2020, after the Korea International Trade Association said that rising freight costs and capacity shortages were disadvantaging local SMEs.
Thereafter, an agreement, signed on 29 October last year, saw HMM provide extra capacity until February 2021, and the latest agreement, with the Ministry of Oceans and Fisheries, and other Korean agencies, essentially extends the arrangement.
Since November 2020, HMM has provided 5,018TEU of capacity to SME shippers on 16 Transpacific voyages. The new agreement obliges HMM to reserve 350TEU for SME shippers on Transpacific services and 50TEU on Asia-Europe services. HMM CEO Bae Jae-hoon said, “We plan to support seaborne exports to strengthen local SMEs’ competitiveness.”
HMM and KOSME will have further discussions if there is a need to extend the agreement into 2022. KOSME chairman Kim Hak-do said that the recent Suez Canal logjam following had highlighted the possibility of logistics bottlenecks and SMEs need all possible support. Kim noted that local shippers continue to face challenges in securing shipping services, as freight rates remain high, caused by increased demand following the Covid-19 pandemic and the subsequent slow return of empty containers from the US that resulted in equipment shortages.
He said, “KOSME will expand co-operation with HMM and other export-related organizations to establish a possible logistics stability network.”
In the meantime, HMM confirmed that its 16,000TEU HMM Nuri, the first of eight same class newbuild vessels, has started its first voyage from the port of Busan in Korea.
HMM Nuri is deployed on the Far East Europe 4 (FE4) route under THE Alliance’s product plan, with its port rotation of Busan, Shanghai, Ningbo, Yantian, Singapore, Suez Canal, Rotterdam, Hamburg, Antwerp, Southampton, Suez Canal, Yantian, Hong Kong, Shanghai, and Busan.
The South Korean carrier is expected to receive the rest of the newbuildings of this class, built at the Ulsan shipyard of Hyundai Heavy Industries, by the end of June.