HMM Ultra-Large Container Ship No. 5 Also Fully Loaded... Expectations Rise for Return to Profitability

Line 2 Osloho Backhaul Route Filled 99.9%

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] HMM (formerly Hyundai Merchant Marine)'s ultra-large container fleet continues its streak of fully loaded voyages, raising growing expectations for a return to profitability.

According to HMM on the 21st, the 5th 24,000 TEU-class container ship, the 'Gdansk,' recently set sail fully loaded with 19,513 TEU of various cargo from the Port of Singapore to Europe. The industry generally considers 19,300 TEU as the full load benchmark for a 24,000 TEU-class vessel. With this, HMM has maintained full load records from the 1st to the 5th ultra-large container ships. Currently, the 6th and 7th ships are operating on Asian routes, and the remaining five vessels are under construction. The industry expects these to also achieve significant load factors.

Good news has also continued on the backhaul routes. Following the 1st ship, Algeciras, achieving a full load, the 2nd ship, Oslo, loaded 19,276 TEU in Europe and is returning home with a 99.9% load factor. Considering that some containers were offloaded due to draft issues at departure, this is effectively a full load achievement.

Some in the industry attribute this full load streak to the 'newcomer effect' following HMM's official membership in THE Alliance last April, but fundamentally, the cost competitiveness of ultra-large container ships is widely regarded as the main cause. In fact, Europe, typically classified as a consumer market in the global market, imports many goods from Asia but has relatively little export cargo. As a result, backhaul load factors generally hover around 50%.

An HMM official stated, "Generally, a 60-70% load factor on the route returning from Europe to Asia is considered successful," adding, "The fact that the 2nd ship, following the 1st, has effectively achieved full load means that both shippers and alliance carriers sharing the cargo space recognize the competitiveness of ultra-large container ships."

Meanwhile, in the securities market, there are even expectations that HMM turned a profit in the second quarter. This means HMM could achieve profitability one quarter earlier than its cautious target set at the beginning of the year for the third quarter. In the first quarter, despite the adverse impact of the COVID-19 outbreak in China causing shutdowns, HMM succeeded in cost control, reducing its operating loss to 2 billion KRW.

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