Supply Chain Research

The South Korean government’s commitments to support the shipping industry financially have begun to bear fruit. It will provide Hyundai MM with finance for five new VLCCs as well as a $605 million sale-and-leaseback arrangement for existing vessels. That would bring Hyundai MM’s financial gearing (debt to total capital) down to 26% from a peak last year of 99%, and close to Maersk’s lowest-in-peer-group 24%. The industry’s concern should now be whether capacity discipline, a recent support for higher shipping rates, will be maintained.