HMM (formerly Hyundai Merchant Marine), the largest ocean container shipping company in Korea, recorded the highest quarterly performance since its inception, with operating profits exceeding KRW 1 trillion in the first quarter of this year.
HMM's good performance is meaningful in that it announces the resurgence of the Korean shipping industry, which had fallen into a long stagnation.
However, there are voices of caution that we should not neglect investments such as placing orders for super large ships during a difficult boom, taking into account the characteristics of the shipping industry, which is a cycle industry.
HMM recorded KRW 1,19.3 billion in operating profit in the first quarter of this year, which turned into a surplus compared to the same period last year.
Sales increased by 85% to KRW 2.428 trillion.
This is the highest quarterly performance since HMM's predecessor, Hyundai Merchant Marine, was founded in 1976, and in particular, operating profit exceeded the total (980.8 billion won) last year.
Considering that domestic shipping companies have suffered a deficit over the past 10 years, HMM's'earning surprise' is surprising.
This is why there are interpretations that HMM has lifted the domestic shipping industry out of the swamp of prolonged recession.
The beginning of the Korean shipping industry'bad luck' dates back to 2008-2009, when the global financial crisis hit.
At that time, major shipping companies such as Musk and MSC entered the'Freight Chicken Game' by increasing the size of ships when the recession hit.
However, domestic shipping companies such as Hanjin Shipping and Hyundai Merchant Marine could not keep up with this trend.
In particular, the crisis became more serious when Hanjin Shipping, the No. 1 shipping company in Korea and 7th in the world, went bankrupt at the end of 2016 due to liquidity problems.
Due to the bankruptcy of Hanjin Shipping, which had a world market share of 3%, Korean fleet volume, which reached 1.05 million TEU in early 2016 (1 TEU is one 20-foot container), fell to 460,000 TEU at the end of 2016, and the shipping ranking was also out of the top 10 Was pushed out.
Hyundai Merchant Marine survived by transferring management control from Hyundai Group to Industrial Bank, but it was not enough to escape the swamp of deficits.
However, signs of a reversal emerged as the government invested in 2018 to save the Korean shipping industry on the verge of collapse.
The government established the'Five-Year Shipping Reconstruction Plan' in 2018 and established the Korea Maritime Development Corporation to support Hyundai Merchant Marine's orders for 20 super-sized ships (12 24,000 TEUs and 8 16,000 TEUs).
It can be said that extra-large ships can greatly reduce the cost per unit, which influences the competitiveness of shipping companies.
In addition, Hyundai Merchant Marine also started off as HMM and joined the world's three major maritime sports alliance'The Alliance' as a regular member last year.
In the alliance, HMM has increased operational efficiency by introducing 12 container ships, the world's largest 24,000 TEU.
In addition, shipping companies adjusted their fleet volume in the aftermath of Corona 19, and freight rates surged to two to three times that of the previous year as cargo volume surged from the second half of last year.
In the end, it is evaluated that the domestic shipping industry has been able to survive as the government's investment and the improvement of the shipping efficiency of the shipping company have been combined with an increase in cargo volume and a surge in freight rates.
(Photo = Yonhap News)