Hyundai Glovis uses containers to ship cars as PCTC shortage bites

Hyundai Glovis uses containers to ship cars as PCTC shortage bites

The Load Star — 2023-08-01

Maritime and Ports

Hyundai Glovis CEO Lee Kyoo-bok said on Friday, July 28, 2023, that the company had shipped cars in containers to make up for the tight availability of pure car and truck carriers (PCTCs).

It is the first time Hyundai’s logistics unit has admitted to being affected by the short supply of PCTCs.

Mr Lee, speaking after the release of Glovis’s H1 23 results, said its own PCTC fleet of 72 owned and chartered vessels was insufficient to meet the post-pandemic rebound in vehicle exports and the company would need more ships.

Glovis’s H1 net profit was KRW574.33bn ($436.42m), down 4% on the same period a year ago. Profitability had also been affected by rising costs, with the company locked-in to contract rates concluded in 2022, preventing prices from being increased.

Hyundai Motor is the third South Korean carmaker to start moving vehicles in containers, after KG Mobility (formerly SsangYong Motor) and Renault Korea. During the pandemic, older PCTCs had been demolished and fleet renewal was slow, as many countries imposed movement restrictions, which resulted in a dearth of PCTCs to meet recovering vehicle demand. PCTC charter rates have topped $110,000/day.

Mr Lee’s revelation dispelled the perception that Hyundai Motor had been insulated against the PCTC shortage, as, unlike KG and Renault Korea, it has its own shipping operation.

He said Glovis planned to improve its H2 23 profit margin by charging shippers more.

And it will expand its PCTC fleet, including upping vessel capacity to 8,000-car units, from 6,000. Glovis has arranged to charter six to eight new PCTCs in 2024, and another four in 2025, raising its carrying capacity by 25%.