South Korea’s Hyundai Merchant Marine Co. (HMM), which the government has been grooming as the country’s principal sea flag carrier in place of now-defunct Hanjin Shipping, formed a strategic alliance of the world’s largest shipping alliance 2M, a move that is expected to help it enhance its competitiveness.

Yoo Chang-keun, chief executive officer of HMM, inked an agreement dubbed ‘2M+H strategic cooperation’ with Maersk CEO Søren Skou and Mediterranean Shipping CEO Diego Aponte in California, U.S. on Wednesday (local time).

The 2M+H strategic cooperation agreement is a different form of alliance that provides limited access to other members’ cargo rooms compared with a full membership that grants 100-percent sharing of cargo capacity between 2M members. Still, the new partnership is expected to help the Korean shipper save costs and boost competitiveness by sharing ships and networks with other member shippers of the 2M shipping club including Maersk, the world’s largest container shipping company, and Mediterranean Shipping.

Under the terms of the agreement, HMM will be able to exchange cargo spaces on the west coast of the United States and purchase cargo rooms on the east coast of the U.S., Northern Europe, and Mediterranean for three years starting April 1, 2017.

The partnership with the world’s largest shipping alliance is expected to boost its cargo capacity about 22 percent from its previous capacity when it was a member of G6 Alliance. Also, the cargo capacity on the west coast of the U.S. with heavy shipping traffic is projected to surge 50 percent, industry watchers said.

Upon securing its membership, the company has obtained one additional Asia-U.S route. It currently operates two routes to the west coast of the U.S.

The Korean government has been seeking to funnel fresh fund into HMM with an aim to breed it as a globally competitive Korean carrier in lieu of bankrupt Hanjin Shipping. With the government’s aid, HMM will be able to purchase additional terminals at home and abroad and enlarge its fleet of containerships.

Shares of Hyundai Merchant Marine ended Thursday at 9,240 won ($8.16), up 230 won or 2.55 percent from the previous session.

By Kim Jung-hwan

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]