Hyundai Merchant to allocate more ships to U.S. routes to meet demand
SEOUL-- Hyundai Merchant Marine Co., South Korea's leading container carrier, said Thursday it will allocate more vessels to meet rising demand on U.S. routes in the coming months.
The shipping company expects a shortage of container carriers on the high-traffic routes from August to October as U.S. customers want more products from China and Southeast Asia.
Hyundai Merchant, which currently operates 110 vessels, will consult with its alliance partners such as Maersk Line of Denmark and Mediterranean Shipping Company (MSC) of Switzerland to decide on whether to increase the number of container ships, a company spokesman said over the phone.
"As Maersk and MSC also deliver their products through our container carriers and vice versa on the U.S. routes, we need to consult with them first," he said.
Hyundai Merchant runs 15-16 8,000 twenty-foot equivalent unit (TEU) ships on the routes from China and Southeast Asian countries to Los Angeles and Seattle, the spokesman said.
Helped by increased demand on long-haul routes, shipping rates are on the rise, the company said without elaborating.
Hyundai Merchant generates 80 percent of its sales from the container ship business, with the remaining 20 percent coming from bulk ship operations.
The state-run Korea Development Bank owns a 14.15-percent stake in the shipping line, with the remainder held by other financial institutions and individuals. Hyundai Merchant is the shipping unit of Hyundai Group, an elevator-to-resort conglomerate.
Given the strong demand on U.S. routes, the shipping company appears to be recovering from oversupply and low shipping rates following the 2008 financial crisis.
But its first-quarter earnings results show the company is still struggling with oversupply with improvements taking place at a slow pace.
"It's safe to say the global shipping industry bottomed out last year although it has yet to make a full turnaround," he said.
In the January-March quarter, the company's net losses widened to 734.63 billion won (US$652 million) from 276.13 billion won a year earlier, according to a regulatory filing.
Source: Yonhap News Agency