HMM’s first-half results are incredibly low compared to last year’s levels with the company’s profits falling over 90% year-on-year.
In the first six months of 2023, the South Korean major shipping company reported net profit of US$460 million, which is 90% down to the same period last year, operating profit of US$360 million, translating to a 92% decrease over 2022 first half, and revenue of US$3.2 billion, representing a 58% year-on-year decline.
“The container shipping industry has been experiencing an overcapacity, mainly led by the influx of new container ships ordered during the pandemic and supply chain normalisation at major ports and inland regions,” said an HMM official, adding that “the cascading effect of larger vessels from the main east-west trades to smaller lanes intensified the imbalance between supply and demand.”
Consequently, the freight rates in most key trade lanes have been under downward pressure during the first half, according to the company’s statement.
HMM’s representative continued, “In the case of Transpacific trade, we expect to see a gradual recovery in cargo volumes as a rebound in inventory restocking and a soft landing for the US economy are likely to come to fruition, with no drastic changes in the supply side in the near term.”
The Seoul-based ocean carrier, whose acquisition has become a dramatic saga of the shipping industry in the latest months, said it will continue to carry out service adjustments such as introducing the FIM (Far East Asia, India and the Mediterranean Sea) routes, cost-cutting measures and enhance operational efficiency to cope with market uncertainty.