South Korea’s Hyundai Merchant Marine Co. (HMM) that has been making an all-out effort to join world’s largest shipping alliance 2M as an operating partner is reportedly experiencing hardship in proceeding with negotiations after one of the members hinted “other cooperation possibilities.”

According to multiple sources from the shipping industry on Friday, 2M Alliance - led by Maersk Line and Mediterranean Shipping Co. - is considering the possibility of sharing in between 20,000 to 30,000 twenty-foot equivalent units (TEUs) of its total container capacity on the Asia-United States shipping route with HMM. Such partnership that is limited to sharing cargo capacity is considered one of the lowest level available in a shipping alliance. Sources note that it is most likely that HMM will likely join the 2M alliance on limited terms rather than as a full operating partner.

The Wall Street Journal on Thursday also reported that other cooperation possibilities are being discussed between the parties involved. An official from Maersk Line was quoted as saying that “the parties have discussed the possibility of HMM joining 2M as an operating partner and now decided to look at other cooperation possibilities,” such as “exploring a more limited agreement involving putting containers on each other’s ships and Maersk taking over some of HMM’s charter deals.”

An unnamed official from Hyundai Merchant Marine, however, dismissed the report, saying that “negotiations to join the 2M alliance are still in progress” and that parties are “fine-tuning details.” Negotiation results will be announced immediately after agreement is settled, the official added.

Industry sources expect final results to come out sometime around next Tuesday.

HMM has been desperate to join the 2M alliance to expand its global presence including market share to well maintain its position as Korea’s largest container carrier after Hanjin Shipping Co. went under court receivership. Becoming a full member of the 2M alliance would help HMM to save costs and boost competitiveness amid the sluggish shipping industry environment.

It is often the case that members of other shipping alliances are more closely connected as they share routes and container vessels rather than empty out limited container space, which is reportedly being raised as one of the cooperation possibilities for HMM with the 2M community.

For example, members of the CKYHE Alliance share exclusive sea routes with each other while those of the G6 Alliance schedule routes together.

Sources project that it will be unlikely for HMM to be able to fully join the 2M alliance as an operating partner but on limited terms as other members feel there is a big gap in the size of their container capacity. HMM is world’s 13th largest container carrier in terms of container capacity while Maersk and Mediterranean Shipping are world’s two largest cargo carriers.

By Kim Jung-hwan

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