In September, HMM ordered 20 eco-friendly mega containerships, including twelve 23,000 TEU and eight 15,000 TEU vessels. With the vessel deployment in 2020, HMM expects that fixed costs will significantly decrease, fuel efficiency will largely improve, and that bunker costs will moderately decrease through installed scrubber systems for compliance with IMO 2020 environmental regulations. The timely deployment with this combination of cost competitiveness is expected to attract customers, partners and investors.
Cost competitiveness and the mega containerships is in line with ‘Capacity of 1 Million TEU’ strategy that will play an important role for HMM in obtaining economies of scale. This strategy will lead to additional cost reduction.
Since HMM’s recent new shipbuilding orders, improved financial stability and Korean public supports, customer expectations and trust for HMM’s service has remarkably improved. As a result, HMM’s vessel utilization level and handling volume has significantly increased. In terms of average utilization level (round trip), HMM achieved 75% in 2016, but it increased to 78% in the first half of 2018 and expects over 80% in the second half of this year.
HMM’s handling cargo volume has dramatically increased by 30% from 3 million TEU in 2016 to 4 million TEU in 2017 without fleet expansion, and now the shipping line expects 4.5 million TEU in handling volume in 2018.
Support and trust from customers is evidenced by HMM increasing its Far East – Europe service market share by over 50% through its newly introduced AEX service, which has continually recorded full booking since its first sailing in April this year.
HMM has been in the container business for over 30 years since mid-1980’s. Today the company operates 94 branch offices all over the globe, and conduct businesses with 7,000 regular customers per week. The management sees 7% market share in East-West trades by 2021 as an achievable goal for HMM.
