The Korea Shipping Partnership (KSP) has the “assets to become one of the strongest driving forces in the Intra-Asia market” and is the first step towards consolidation in the trade lane, said a senior analyst.
It was reported last week that South Korea’s container shipping lines are clubbing together to form a domestic alliance. All 14 container shipping lines, reportedly including the largest, Hyundai Merchant Marine (HMM), and also new entrant SM Line, are set to create Korea Shipping Partnership.
SeaIntelligence Consulting chief executive Lars Jensen said that if the vessels that HMM operates as part of its agreement with 2M are excluded, KSP will control more than 460,000 teu of capacity across more than 240 ships.
Mr Jensen said that this is 24% larger than PIL – currently the largest player in the market – twice the size of Wan Hai, 2.5 times the size of MCC and three times the size of X-Press Feeders.
But he warned: “It remains to be seen how the KSP will de facto operate and it is always clear that alliance constellations are less efficient than actual consolidation. Hence the announcement points towards physical capability. The next step is to demonstrate the ability to plan and execute accordingly, including the ability to properly design a complex efficient network fully leveraging the large vessel base.”
Mr Jensen added that this should be seen as a step towards consolidation in the highly-fragmented Intra-Asia market.