Hyundai Glovis, a prominent player in the global car shipping industry, has teamed up with South Korea’s major ocean carrier HMM (formerly known as Hyundai Merchant Marine) to capitalize on the thriving car shipping sector as freight rates for vehicles keep climbing, with further escalation in rates predicted. This increase is attributed to a scarcity of vessels and a rise in Chinese automobile exports.
HMM, South Korea’s container shipping leader and worldwide shipping player, will be reentering the automobile shipment business.
In the early 2000s, HMM exited the automobile shipment business, no longer shipping cars and trucks across the world. But now, HMM has ordered seven new shipping vessels that will see the shipping giant return to automobile shipping. The new ships will be operated by Hyundai Glovis and will allow 25% more capacity to ship automobiles worldwide. The ships are expected to be delivered next year and put into service quickly.
With plans to expand its car carrier fleet to 110 vessels, up from 87 currently, Hyundai Glovis aims to transport over half of the new capacity with vehicles from other automakers, rather than just Hyundai Motor Co. and Kia Corp.-made vehicles. This will ensure market diversification and bigger market shares for automobile shipping.
The decision of Hyundai Glovis to partner with HMM and get the shipping giant back into the automobile shipping business is no coincidence.
The decision is timed as the automobile shipping market sees demand skyrocket. After Covid and some related disruptions, there has been a shortage of car carriers while demand remained high. This is turn has raised shipping rates and backorders. At the same time, the Chinese car market is exporting more inventory worldwide than previously, including some new electric vehicle makers, so this has further reduced supply of automobile shipping vessels.
Hyundai Glovis is capitalizing on these new market realities and plans aggressive growth for car shipping services and a rapidly-diversifying client base, and shows no signs of stopping.
