Hyundai Glovis Signs 5-Year Long-Term Vehicle Transport Contract with Volkswagen Group

Exclusive Transport of Volkswagen's 12 Subsidiary Brands' Europe-Originated Shipments to China

[Asia Economy Reporter Yu Je-hoon] Hyundai Glovis has signed a long-term maritime transportation contract with Volkswagen Group, the largest automaker in Europe, for five years. This is the largest maritime contract Hyundai Glovis has secured from a global automaker to date.

Hyundai Glovis announced on the 2nd that it has signed an exclusive maritime transportation contract for finished vehicles from Europe to China with Volkswagen Konzernlogistik, the logistics subsidiary of the German automaker Volkswagen Group.

Under this contract, Hyundai Glovis will exclusively transport passenger cars produced by Volkswagen Group in Europe to China 10 times a month for five years (a basic three years with a two-year extension option) until 2024.

The contract amount is approximately 315 billion KRW, and if the two-year extension option is exercised, the additional contract amount will be 203.1 billion KRW, totaling 518.2 billion KRW. According to the company, this is the largest volume contract Hyundai Glovis has secured with a non-affiliated global automaker since entering the car carrier market in 2008.

Although the transportation volume was decided to remain confidential through mutual agreement between the two companies, the contracted maritime transportation route is considered one of the largest volume routes in the global automobile shipping sector.

Hyundai Glovis expects that this contract will allow it to fill the capacity on the Europe-to-Far East route, which has relatively lacked backhaul cargo compared to other routes, thereby improving fleet operation efficiency.

In particular, Hyundai Glovis places great significance on signing a five-year long-term maritime transportation contract, which exceeds the typical two-year contract period between automakers and shipping companies. This is seen as a result of high trust based on the relationship with the shipper.

A Hyundai Glovis official stated, "Based on our expertise in operating car carriers, we plan to provide world-class high-quality transportation services."

Meanwhile, this long-term contract is also expected to significantly increase the proportion of Hyundai Glovis’s maritime transportation sales from non-affiliated automakers. In Hyundai Glovis’s car carrier business division, sales from non-affiliated companies were about 40% in 2016 but rapidly expanded to 53% last year.

This content was produced with the assistance of AI translation services.