HMM has begun looking for an external ship manager to handle its bulk carriers. HMM, whose main business is container ships, has so far entrusted most of its vessels to its subsidiary HMM Ocean Service (HOS). With the company pushing to expand and diversify its fleet types recently, it is seeking ways to manage vessels more efficiently.
According to the shipping industry on the 29th, HMM is conducting a review of domestic ship managers to outsource the management of multiple bulk carriers. Wellhemson Ship Management and Synchro Shipping are among those reportedly under consideration.
Ship managers handle most vessel-related tasks, from crew recruitment and personnel management to maintenance and safety management, compliance with industry standards and international maritime regulations, and improving operational efficiency. Even excluding direct operating costs such as fuel, annual costs per vessel run into hundreds of millions of won.
Until now, HMM has entrusted most of its vessels to its wholly owned subsidiary HOS. As of the end of last year, HOS managed about 130 of HMM's 145-ship fleet. Aside from vessels operated by the Greek carrier Tsakos, most vessels managed by HOS are HMM's.
Through management fees and other income, HOS posted sales of 40.2 billion won last year, up 24% from a year earlier. During the same period, operating profit and loss came to a 1.4 billion won deficit, swinging to a loss from a 300 million won surplus the previous year. In the vessel and crew management segment last year, cost of sales rose 31% from a year earlier due to performance-based pay, which weighed on results.
In the shipping industry, the view is that, given these circumstances, HMM is pursuing outsourcing of bulk carrier management so HOS can focus solely on container ship management. The aim is to allow HOS, which has a higher cost structure, to devote resources to container ships, which are relatively more demanding to manage.
Container ships carry a wide variety of cargo on a single vessel and call at many ports, so they face more regulations and inspections than bulk carriers, and there are more items to maintain. Because schedule integrity is also more critical for container ships than for bulk carriers, predictive maintenance is especially important.
Under its mid- to long-term strategy, HMM plans to increase its bulk carrier fleet from 51 vessels now to 110 by 2030. However, for now, HOS manages only 20 bulk carriers. For this reason, if HMM continues to outsource bulk carrier management, the outsourced ship management market is also expected to grow, according to industry views.
This year, HMM is set to take delivery of two bulk carriers of 55,000 DWT or less, three pure car and truck carriers (PCTC), and two multipurpose vessels (MPV). Next year, deliveries are scheduled for two very large crude carriers (VLCC), two PCTCs, and two bulk carriers of 50,000 DWT or less.
An HMM official said, "As our owned fleet has grown significantly, we are exploring third-party entrusted management to improve efficiency."