South Korean carrier Hyundai Merchant Marine is soon to advance into Vietnam’s logistics industry along with institutes such as Busan Port Authority. The company recently joined THE alliance, one of the three major maritime alliances, to expand its maritime networks. Its next strategy is to turn a profit faster by advancing into the logistics business.
According to an industry insider on Sunday, Hyundai Merchant Marine held a meeting to advance into the Vietnamese logistics business along with Busan Port Authority and other medium-sized domestic businesses. It decided to build a large warehouse or an inland container depot after finding business items in the Northern and Southern regions in Vietnam with these companies.
Some analyze the plan as one of the business diversification strategies of CEO Bae Jae-hoon, who took office in March this year. “Hyundai Merchant Marine needs to take an approach from the perspective of shippers,” the former CEO of Pantos Logistics said. He means that the company should provide comprehensive services from inland transportation, storage and loading as well as carrying goods via ocean for shippers to have an competitive edge.
The Korean shipping company plans to secure stable volumes as it operates cold storages and warehouses with Vietnamese shippers. In late 2017, the company signed a Memorandum of Understanding for port terminal and logistics facility development with SNP, the largest logistics company in Vietnam. The two companies formed a joint venture two years ago, but now domestic businesses are taking the lead to provide comprehensive logistics services.
“Hyundai Merchant Marine is still showing a loss, but it ordered 20 supersized container vessels last year,” said a shipping industry insider. “It will run a surplus after the second half of next year when its logistics business and THE alliance create a synergy.”