Ship Shortage Crisis... HMM Deploys 5th Temporary Vessel to Support Exports to the U.S.

64% of Shipped Cargo Consists of Mid-sized and Small-Medium Enterprise Cargo

[Asia Economy Reporter Yu Je-hoon] Amid the worsening shortage of vessels in the international shipping market due to the impact of the novel coronavirus disease (COVID-19) pandemic, the Korean shipping company HMM has deployed its fifth temporary vessel to support exports to the United States.

According to HMM on the 30th, the 4,600 TEU (a unit referring to one 6m container) class vessel HMM Integral departed from Busan Port late in the afternoon and is heading to the Port of Los Angeles (LA), USA. This vessel is the fifth temporary ship organized by HMM since the COVID-19 outbreak.

This temporary voyage includes air purifiers symbolizing K-quarantine, domestically produced masks, and hand sanitizers. Notably, automobile parts amounting to 1,000 TEU were also loaded and are scheduled to be delivered to ensure uninterrupted operation at three major automobile manufacturing facilities in the United States.

HMM’s consecutive deployment of temporary vessels is due to the intensified 'supply shortage' phenomenon as maritime cargo volume, which had contracted due to COVID-19, surged sharply in the second half of the year. According to Alphaliner, a French shipbuilding and shipping analysis agency, the global idle vessel rate rose to an all-time high of 11.6% at the end of May but dropped to a record low of 1.5% this month. Excluding vessels docked for breakdowns and repairs, all ships are currently deployed on routes.

Domestic small and medium-sized export companies are struggling not only with soaring freight rates but also with difficulties in securing vessels, causing export challenges. As of the 27th, the Shanghai Containerized Freight Index (SCFI), an international container shipping freight rate indicator, surpassed the 2000 mark, reaching an all-time high since its inception.

Accordingly, HMM decided to organize temporary vessels to support small and medium-sized export companies. It is known that about 64% of the 3,880 TEU cargo loaded on the HMM Integral departing today consists of cargo from small and medium-sized enterprises. An HMM official stated, "Deploying temporary vessels on the trans-Pacific route requires reallocating vessels previously deployed, obtaining prior consent from partner carriers in joint operations, and managing the burden of cargo storage and handling due to schedule changes. Despite these difficulties, we are securing temporary vessels and continuously deploying them on the trans-Pacific route to fulfill our role as a national shipping company."

Meanwhile, HMM plans to deploy two additional temporary vessels next month.