EXPLORING NEW TRADES AND GEOGRAPHIES

“We want to keep focussing on new trades and geographies, special cargo business like reefers, OOG and break bulk – that would be the key to our success, not only in 2019 but in coming many years,” reveals Dong Hwan Oh, Managing Director, IHQ, Hyundai Merchant Marine India Pvt Ltd

Q.How has been the business in 2018 and what are your expectations in the coming years?

Compared to year 2017 we have seen an 18% growth on our exports and a similar 19% growth on our imports in year 2018. This has been possible with our right asset deployment in both North and South of India, opening of new markets like Middle East, Maldives, Bangladesh and clubbed with positive external environments like stable government, massive investments in infrastructure, relaxation in Cabotage rules and various Sagarmala project initiatives. We expect a similar growth (if not higher) in year 2019 as well.

Q.The industry has faced low freight rates and high bunker costs in 2018. Do you expect any change in scenario in the New Year?

An increasing bunker price in container shipping, especially in the short term, is only partially compensated through surcharges and will therefore affect earnings negatively.

With the prospect of volatile times ahead, and bunker prices likely to take the container industry on a wild ride, it needs a transparent and standardized tool for handling bunker prices in container freight. That is what we are aiming to provide by introducing shortly a new quarterly floating bunker formula (bunker recovery surcharge). Some major carriers have proposed 1st Jan 2019 as the start date and have indicated examples of surcharge amounts dependent on fuel price.

Q.What is the significance of Indian market in the complete business network of HMM?

HMM’s target is of building up its capacity to 1 million TEUs by 2020 and posting US$ 10 billion in annual revenue by 2022.

HMM India contributes roughly 5 per cent of the total Volumes of HMM Globally. And with the growth projected for HMM India in coming years (which is roughly in double digits), we are hugely dependent on India’s contribution to HMM.

We want to keep focussing on new Trades & Geographies, Special Cargo business like Reefers, OOG and Break Bulk – that would be the key to our success, not only in 2019 but in coming many years. Further we are looking at investing in terminals to avail benefits such as cost savings, stable berth operations and the other additional benefits from new terminal business to 3rd party.

Q.With Cabotage relaxation are you planning to target coastal and transhipment cargo?

Yes transhipment for sure, today we are connecting our Kolkata laden cargo via Krishnapatnam port and vice versa. Also started leveraging our network to position empties into the various deficit areas within India like Nhava Sheva to Mundra, Chennai to Krishnapatnam, Vizag etc. This will further gain momentum as we make inroads into the Indian market in coming years.

 Q.Tell us about digitalisation at HMM?

HMM aims for full adoption of Cloud based next generation system by 2020. This enables high level of security and swift & stable information technology. HMM vision for 2022, is to improve productivity by connecting Block Chain and IoT technology to our services.

Q.Tell us about your connectivity to east and west coast?

We have 5 mainline services calling the west coast of India today i.e. CIX, CI2, CI3, WIN and TNS. And 2 mainline services calling South of India i.e. ACS and TCS With Krishnapatnam call added on ACS service, we are successful in connecting both Vizag & Kolkata cargo as transshipment at KRI hence very well connecting the East coast of India.

Q.HMM has a mega plan to post $10 billion in sales by 2022. How are you working towards achieving this goal?

Focus will be on new Trades & Geographies, Special Cargo business like Reefers, OOG & Break Bulk, and Bigger Vessels leading to a better market share and at the same time how we actively push to take the freight rates up.