South Korean shipping giant HMM to invest $11.5B over 5 years for expansion

sk shipping giant hmm invest 11

HMM Co Ltd, South Korea’s largest container shipping firm by sales, said it planned to invest 15 trillion won ($11.46 billion) over the next five years to increase its capacity drastically.

HMM, plans to expand its shipping capacity to 1.2 million 20-foot equivalent units (TEU) from the current  820,000 TEU by 2026 and increase the number of bulk carriers to 55 from 29. Investments will also be made into terminals and logistics facilities, the firm, which split from South Korean conglomerate Hyundai Group in 2016, revealed in an official statement.

The investment plan comes amid global port congestion, which logistics executives predicted will persist until at least early 2023, as the COVID-19 pandemic lengthens ship delivery times, the Russia-Ukraine conflict, and the Shanghai lockdowns disrupt supply chains.

Beyond the bulk and container business HMM is investing in areas such as digital and environmental strategy. Looking to the environment, the firm will explore the likelihood of ordering ships capable of using alternative fuels in the future and contribute to R&D efforts to develop carbon neutral fuels.

According to Maersk, the world’s largest container shipping firm, shipping costs have jumped 25%-30% since the beginning of the COVID-19 pandemic due to inflationary pressures that are unlikely to ease any time soon.