South Korean national-champion container line HMM has been added to the U.S. Federal Maritime Commission's list of "controlled carriers," which means that FMC views HMM as a state-owned enterprise.
"Controlled carriers" are container lines that are owned or controlled by a foreign government. All of the others on the list are Chinese state enterprises, including Cosco Shipping - the world's largest shipowner by tonnage - and its subsidiary OOCL. The only other firm on the list is the much smaller Chinese carrier Hede International Shipping Ltd., a new entrant in the transpacific trade and a division of state-owned Tangshan Port Group Corporation.
Controlled carriers are subject to extra regulatory scrutiny from the FMC, tempered by exceptions for carriers controlled by allied nations. South Korea is a longtime American ally, so HMM is exempt from most requirements. It remains subject to two narrow provisions about service contract disputes and annual reporting, which would not affect most shipper interactions.
Two state-owned policy banks, KDB and KOBC, acquired most of the shares in HMM in a series of bailouts beginning in 2016. However, the FMC's designation could have been avoided if a privatization deal had gone through earlier this year. In 2023, KDB and KOBC tried to sell HMM to a private buyer and return it to fully commercial management. The banks rejected a foreign bid from German line Hapag-Lloyd and selected a domestic bidder - a consortium formed by poultry company Harim Group and private equity investor JKL. This Korean JV offered nearly $5 billion for KDB and KOBC's shares, and the two sides entered talks to iron out the details. Those conversations stalled in January and fully failed in February, brought down over reported disagreements over KDB and KOBC's retention of convertible bonds, which would have diluted the JV's stake if exercised after the sale. As part of the sale offering, the two banks planned to continue to hold the remaining bonds and warrants until at least 2025 and work with the buyer to agree to terms for their later sale.
In March 2024, the South Korean state formally abandoned plans for privatizing HMM.
"We have no plan to restart sales of HMM for now," South Korea’s Oceans Minister Kang Do-hyung said in March. "As the company is injected with the state fund, we plan to set plans so that it can be operated soundly."
Under government ownership, HMM has continued to invest in advancements for its fleet, including a novel onboard carbon capture system for a small container feeder - courtesy of Samsung Heavy Industries - and an early rollout of eBL technology for shippers. It has also ordered newbuild dual-fuel methanol boxships, begun using biofuel blends, and trialed a range of fuel efficiency tech interventions.
