Minister Munsung-hyuk Proves Success of Maritime Reconstruction Program with 'HMM Profit'

Moon Sung-hyuk, Minister of Oceans and Fisheries, is announcing the "Five-Year Plan for Shipping Reconstruction Performance Review and Shipping Policy Operation Direction" at the Government Sejong Complex on the 12th.

[Sejong=Asia Economy Reporter Joo Sang-don] "I believe that HMM (formerly Hyundai Merchant Marine) turning a profit after 21 quarters is undoubtedly the result of the 5-year Maritime Reconstruction Plan."

On the 12th, Moon Sung-hyuk, Minister of Oceans and Fisheries, announced the "Performance Review of the 5-year Maritime Reconstruction Plan and Direction of Maritime Policy Operation" at the Government Complex Sejong, citing the government's 5-year Maritime Reconstruction Plan as the main reason for HMM's return to profitability.

Minister Moon had to endure critical views regarding the maritime reconstruction program. He said, "When I took office last year and when HMM joined 'THE Alliance,' one of the world's three major shipping alliances, there were many criticisms questioning whether large vessels could be fully loaded with cargo." He emphasized, "However, since the deployment of HMM's 7th container ship, not only the headhaul (the route from Asia to Europe) but also the backhaul (the return route) have been fully loaded." Typically, backhaul cargo load rates average only 50-60%. From the establishment and announcement of the 5-year Maritime Reconstruction Plan centered on rebuilding HMM until recently, there were many doubts and negative views about whether it could succeed, but this improvement in HMM's performance proves the policy's effectiveness.

Since Minister Moon's inauguration in April last year, his achievements in his area of expertise, the shipping and port sectors, are not limited to this. A few days after taking office, Janggeum Shipping and Heung-A Shipping signed a basic agreement to integrate their container businesses. These two domestic companies, ranked 4th and 5th respectively, operating only intra-Asia routes including Korea, China, Japan, and Southeast Asia, have risen to become a top 20 regional container shipping company through this integration. In June of the same year, HMM's membership in 'THE Alliance,' one of the world's three major shipping alliances, was confirmed, and cooperation began in April this year. Based on this, HMM will be able to cooperate on an equal footing with existing members such as Germany's Hapag-Lloyd, Japan's Ocean Network Express (ONE), and Taiwan's Yang Ming Marine Transport Corporation for the next 10 years until March 2030, including vessel sharing. Minister Moon said, "An overseas acquaintance who heard about HMM joining THE Alliance asked again whether it was true," adding, "He acknowledged the government's determination and evaluated that Korea's international credibility in the global shipping market will significantly increase."

Minister Moon also set a goal to transform HMM's operating profit turnaround after 21 quarters from a temporary rebound into a stable structure and achieve net profit in 2022. He said, "We cannot consider HMM's management normalized just because operating profit has turned positive," adding, "We will expand the Asian intra-regional network by increasing the current 590,000 TEU capacity to 1 million TEU by 2022 and support the development of new routes such as the U.S. Southeast, South America, and West Africa." To this end, the government plans to focus on ▲strengthening support centered on the Korea Ocean Business Corporation ▲supporting management innovation for container shipping companies ▲building infrastructure to support the shipping industry.