Visit Our Sponsors
In a ceremony this month at a former Hanjin Shipping office in Seoul, 200 employees - many of them Hanjin alumni - joined SM Line president Kim Chil-bong to celebrate the launch of the new liner service. SM, or Samra Midas Group, has acquired the business operations of Hanjin's Pacific and Asian routes, and it is in the process of buying 21 ships of 4,000-6,500 TEU to operate it according to Business Korea. The first sailing is expected in March.
SM Line may also join with Hyundai Merchant Marine and with feeder lines Sinokor Merchant Marine and Heung-a Shipping to create a small-scale vessel-sharing alliance.
If successful, SM Line plans to grow its fleet to as much as 110,000 TEU, in part by ordering deeply discounted newbuilds. A fleet of this size would put it in the ranks of the world's top 20 largest container carriers. However, with 1.4 million of TEU idled around the world – seven percent of the global total – the market case for additional tonnage may prove challenging.
SM Group had originally intended to acquire Hanjin's liner operations using subsidiary Korea Line, a bulker operator. However, Korea Line's board and stakeholders voted down the purchase early this month, citing concerns that Korea Line lacks experience in the container business and that the industry as a whole faces difficult conditions. SM Group proceeded to create a new entity in order to purchase the Hanjin assets directly.
Enjoy curated articles directly to your inbox.