Danish ocean carrier Maersk Line said there is now consideration of “other cooperation possibilities,” while Hyundai Merchant Marine of South Korea said it expects a “formal agreement either in the end of November or early December.”
A couple of statements over the weekend about the future of the 2M Alliance, the vessel sharing partnership between Maersk Line and MSC, seem to raise more questions than they answer.
Maersk Line issued a statement that said, “Since July 2016, 2M has been in discussions with the Korean container shipping line Hyundai Merchant Marine (HMM) on HMM joining the 2M vessel sharing agreement (2M VSA). The parties have discussed the possibility of HMM joining 2M as an operating partner and now decided to look at other cooperation possibilities.”
Maersk added, “The parties are therefore discussing the possibility of HMM partnering with the 2M network through a slot exchange and purchase agreement.”
The announcement comes one week after the 2M Alliance partners announced the launching of a new transpacific loop between China and Long Beach in December. Maersk will dub it the TP3, while MSC will call it the Sequoia.
Maersk said, “The partnership discussions are ongoing and include the possibility of Maersk Line taking over charters and operations of vessels currently chartered to HMM with the aim of deploying them in the 2M network. The discussions include how we can improve our products on the Pacific trade.”
HMM, for its part, said in a statement to American Shipper that “HMM joining 2M is under discussion in details and the discussion is likely to be concluded shortly. We go over the specifics in various forms and plan to make a formal agreement either in the end of November or early December.”
An HMM official told Korea’s Yonhap News Agency, “We are still in negotiations (with 2M) to iron out differences. Our plan to complete the partnership talks by this month has not changed.”
Maersk said, “Discussions are on-going and we do not wish to comment further until there is any substantial development.”
Lars Jensen, the chief executive officer of SeaIntelligence Consulting, said the announcements seem to have caused “quite a bit of confusion.”
“The way I read this one is that it is up in the air whether they are going to come in as a full alliance member,” he said. “There has been no denial by Maersk that it is going to happen. Clearly, the negotiations are still going on.
“It may or may not be an alliance, but if it is not an alliance, at least they are talking vessel sharing agreement, which for most of the parties here, would fulfill the purpose,” Jensen added.
Dirk Visser, senior consultant at Dynamar, said it appeared the 2M carriers “want the Hyundai capacity, but don’t want so much the company.”
Jensen agreed that 2M is seeking greater scale on the transpacific, which the alliance would gain through a good vessel sharing agreement with HMM. On the other hand, HMM may be seeking access to 2M’s network between Asia and Europe.
“Clearly Hyundai needs 2M more than 2M needs Hyundai,” said Jensen.
Jensen speculated that in the wake of the Hanjin insolvency, a sticking point in the 2M negotiations may be discussions over what happens if one of the partners develops financial problems.
Maersk or MSC may be seeking some sort of assurance that if HMM was to develop financial problems in the future, cargo would be delivered to avoid a Hanjin-style debacle where it took weeks or months for containers to be delivered after Hanjin filed for bankruptcy protection. That might be accomplished with a financial guarantee of some sort from HMM, which might be difficult to arrange given HMM’s recent financial problems and ownership by the Korean Development Bank. On the other hand, Maersk and MSC might be willing to accept that risk and guarantee performance, but demand some sort of compensation in return.
Questions arise on HMM joining the 2M Alliance
