Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Cargo ship overturn to hurt Hyundai Glovis
The Golden Ray car carrier, operated by Hyundai Glovis, is capsized near a port on the coast of the U.S. state of Georgia, Sunday, Sept. 8 (local time). AP-Yonhap
By Nam Hyun-woo
By Nam Hyun-woo
Hyundai Glovis CEO Kim Jung-hoon
The latest capsizing of a Hyundai Glovis car carrier off the U.S. coast will hurt the company's global expansion as the accident casts uncertainties over its ability to win transportation orders from carmakers across the world, logistics analysts said Monday.
Reacting to the overturned cargo ship, investors dumped Glovis shares, expressing concerns over the outlook of the company's complete car shipping business by dumping shares. Share prices ended at 152,000 won, down 1.62 percent from a session earlier while the KOSPI rose 0.52 percent.
Hyundai Glovis said its cargo vessel, named the Golden Ray, was listing heavily off the coast of the U.S. state of Georgia, as of Monday (Korea Standard Time). The vessel had departed the Port of Brunswick and was headed for Baltimore.
Local media reported the U.S. Coast Guard has rescued 20 of the 24 people on board ― 23 crew members and one pilot ― and was attempting to rescue four Korean crew members as of 1:30 p.m. The rescued included six Koreans, 13 Philippines nationals and the American pilot, according to the company.
The 71,178-ton Golden Ray was completed in 2017 and is owned by Hyundai Glovis. It can carry up to 7,400 vehicles and was carrying 4,000 cars bound for the Middle East at the time of the accident.
Reportedly, most of the 4,000 cars were from U.S.-based carmakers and some Kia Motors vehicles were included.
“It is yet to find the cause of the accident, and we will think of other matters including damages and compensation after rescuing all crew members,” a Hyundai Glovis official said.
Though the responsibility for the accident has yet to be determined, pessimism is already on investor sentiment and the shipping outlook of the Hyundai Motor Group unit.
Hyundai Glovis' main business has been the transportation of Hyundai Motor and Kia Motors vehicles and parts, but the company showed a sharp increase in overseas complete car shipping sales, as it expanded shipping businesses with companies not owned by Hyundai Motor Group.
In the second quarter Hyundai Glovis logged 505.9 billion won in sales ($424.6 million) in overseas complete car shipping, up 36.5 percent from a year earlier. The growth was far sharper than the average 10 percent year-on-year growth in the company's sales from other businesses. Of those sales, 54 percent came from shipping cars belonging to outside companies.
“With the accident, concern is growing over the company's track record in the pure car carrier business,” Korea Investment & Securities analyst Choi Go-woon said.
“The tangible loss for Hyundai Glovis will be tantamount to the volume the vessel was able to carry, which is not significant given the company has 55 car carriers and insurance will cover the damaged cargo and the ship,” Choi said. “However, uncertainties will grow over the company's ability to win new shipping orders from global carmakers, given it has a relatively short record of doing business with third-party companies.”