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New kid on the block.

Consolidation is the current buzzword in the container shipping world, but while some old faces are exiting the stage, there is one ambitious newcomer joining the fray.
Founded in December 2016, SM Line Corporation (SM Line) is part of the ambitious South Korean conglomerate Samra Midas Group (SM Group), which also has interests in manufacturing and construction among other activities. SM Group already had some shipping pedigree through its ownership of bulk carrier Korea Line Corporation, acquired in 2013, but SM Line is its first foray into container shipping.
The new entity emerged out of the ashes of bankrupt compatriot Hanjin Shipping, with SM Line first purchasing the defunct carriers' Transpacific non-ship assets for a reported $23 million, followed up by acquisitions of 11 former Hanjin container ships and two terminals in Gwangyang and Inchon.
The abundance of cheap second-hand ships has enabled SM Line to rapidly build its fleet so that it is now on the verge of joining the Top 20 of carriers by operated fleet. It would already be in that group were it not for the short-term chartering out of six former Hanjin ships to MSC and Maersk Line. As of August 2017 the company owns a total of 18 ships with an aggregate capacity of 99,800 teu, along with another five ships totalling 6,000 teu on charter.
Including those ships hired out it would rank 19th in the current global carrier rankings, only about 20,000 teu behind its much longer-established compatriot KMTC. SM Line has said that it plans to operate 30 ships by the end of this year so its entrance into the Top 20 proper is only a matter of time.
In the six months since the start of operations in March, SM Line has grown its operations so quickly that it now offers a total of nine weekly services; six in the Intra-Asia trade (one of which as a slot charterer), two in the Asia-India trade (both as slot charterers) and one in the Asia-West Coast North America trade, scaled back from an initial plan to operate two Transpacific loops. More services will follow as SM Line aims to boost its current 50,000 teu operated capacity at least four-fold, with new services inked for the "near future" that will connect the Far East to the Pacific Northwest, the US East Coast, West Coast South America, Australia, the Middle East and Red Sea.
To assist its international expansion strategy SM Line is to merge with two other SM Group companies, Woobang Engineering and Construction and Korea Shipping Corporation (formerly Samsun Logix before its takeover by Korea Line Corporation in December 2016), while closer to home it is entering into a voluntary partnership agreement with 13 other Korean shipping lines to bolster the domestic trades.
A Memorandum of Understanding (MOU) was signed last month to create the so-called Korean Shipping Partnership (KSP) that has government backing but as of yet offers little in the way of detail. It is understood the KSP will set out to improve the lot of the Korean lines by providing some form of organised structure (headed by the Korea Shipowners Association) with regard to fleet expansion and rationalisation of Intra-Asia service networks. The sheer number of carriers involved demonstrates just how competitive the environment is, but the lack of fanfare from any carrier involved suggests that they may merely be playing lip service to a government initiative designed to repair the country's shipping reputation.
Previous new entrants to trades have tended to destabilise the market to varying degrees as they bought their way in with discounted rates, yet that hasn't proved to be the case with SM Line in the Transpacific, where freight rates didn't falter upon its arrival in April. This will be comforting to those incumbent lines that stand to see their pricing power increase as the number of competitors shrink through the M&A process, but the sudden emergence of SM Line should act as a reminder that container shipping is not a closed shop just yet, particularly with the barriers to entry being so low.
SM Line will not become a rival to the elite global lines in the short-to-mid-term, but is rapid trajectory suggests that it will find a niche in the medium-size category. The abundance of cheap ships on the market means that there are still opportunities for ambitious newcomers to force their way in.




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