According to South Korean media reports on August 23rd, a few days ago, the strike vote held by the HMM Seafarers' Union had the final result, and about 92% of the voters supported the strike. The sailors plan to submit their resignation letters to HMM management on Wednesday.
Will this incident have a great impact on our country? Shanghai Port Shipping related staff told the Financial Associated Press that the above incident made the current situation of tight transport capacity even worse, although it may not have a greater impact on freight rates in the short term, but it will certainly have an impact on the current shipping market, especially the degree of shipping chaos may be intensified.
A number of relevant industry insiders believe that the incident may first lead to an increase in the baggage fee in our country. Shen Jin, head of the Global Rapid Transit Logistics Group, told the Financial Associated Press that the current capacity situation has been alleviated than before, the problem of confusion in shipping schedule is more prominent, and the HMM strike will lead to a series of follow-up chain problems, which may lead to an increase in the cost of withholding.
HMM (Korea Hyundai Merchant Shipping Co., Ltd.) is the largest multimodal shipping company in the world. As a member of the THE alliance among the three major shipping alliances, it plays an important role in the global supply chain. By the end of 2020, HMM has 72 ships, with a total capacity of 719000 TEU, ranking eighth in the world.
On august 19th, the latest Drury WCI index showed $9613.28 per 40-foot container, up 2% from the previous week and an all-time high. In an interview with the Financial Associated Press, people in the shipping industry said, "the freight rate has broken through the skyline. I thought there was little room for it to rise, but I didn't expect it to rise." This person has been engaged in the shipping industry for more than 10 years, and in recent months, the freight rate is like riding on a rocket to make him shout "I don't understand".
The strike, which is mainly caused by labor disputes, will be the first in the history of the HMM. It is understood that between 2013 and 2019, due to the depression of the shipping market, HMM wages were frozen for six years, and the current wage level is quite low.
In fact, HMM has turned a profit since the third quarter of last year. Under the background of tight transport capacity in the global shipping market, freight rates have risen again and again, and the freight index has reached record highs one after another, and the average freight rate has nearly quadrupled in one year. Hyundai merchant (HMM) made an operating profit of US $2.06 billion in the first half of 2021 (January to June), with a profit margin of 45.1%. Except for HMM, a number of shipping companies have exceeded expectations this year, such as global shipping leader Maersk (MAERSKa) 's net profit of US $6.5 billion in the first half of 2021. The rate of return on investment capital ((ROIC)) was 23.7% in the past 12 months. Cosco Marine Holdings (601919.SH), China's shipping market leader, expects its net profit attributable to shareholders of listed companies to be about 37.093 billion yuan in the first half of the year, up 3162% from the same period last year.
The strike in HMM has been closely watched by all parties. Under the strike, South Korean small and medium-sized enterprises are the first to be affected. South Korea's largest shipping company has gone on strike, and the result of export logistics chaos is obviously inevitable. Under the global shipping cycle, it will also be a major test for the global supply chain.
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