The nation’s major container shipping firms continued to post quarterly losses in the first quarter on continuous weak freight rates, low demand in the first two months and rising pressure on operating costs.
Yang Ming Marine Transport Corp (陽明海運), the nation’s second-biggest container shipper by fleet size, reported NT$5.39 billion (US$184.39 million), or N$1.91 per share, in net loss for the first three months, from a net loss of NT$4.1 billion recorded in the previous quarter.
Yang Ming posted the highest quarterly net loss among the three major container shipping companies in Taiwan, with the quarterly loss per share of NT$1.91 marking the second-highest level in its history, only lower than the loss per share of NT$2 posted in the fourth quarter of 2009, the company’s financial statement showed.
Taiwan’s two other major container shippers did not escape from making losses in the January-to-March period either, but reported lower losses compared with the previous quarter.
Evergreen Marine Corp (長榮海運), Taiwan’s largest container shipping firm, reported NT$3.26 billion, or NT$0.94 per share, in net loss during the period, improving from a loss of NT$3.36 billion recorded a quarter earlier.
Net loss of the nation’s third-largest container shipper Wan Hai Lines Ltd (萬海航運), which focuses on the Asian market and shorter intraregional routes, totaled NT$327.89 million, or NT$0.17 per share, better than the NT$533 million loss it posted in the fourth quarter of last year.
Market researchers said the continuous weak freight rate for long-haul routes and in January and February was the major factor that extended losses to the first quarter for the container shippers.
The rising marine fuel price led by the high crude oil price also deepened container shipping companies’ pressure on operating costs, researchers said.
However, container shippers have doubled freight rates for long-haul routes since March.
In addition, intra-Asia rates have been increasing quite aggressively since last month on the back of relatively strong demand for Asian exports in the past few months, data provided by the Intra-Asia Discussion Agreement (IADA) showed.
IADA, a voluntary discussion forum comprised of 30 major container carriers operating intra-Asia services, said putting forward a voluntary and non-binding rate-increase target of US$100 per twenty-foot equivalent unit (TEU) in the middle of last month has supported the trend.
Meanwhile, an additional target increase of US$100 per TEU is expected to come into effect in the middle of this month, IADA data showed.
The successful move was in line with Evergreen Group vice chairman Bronson Hsieh’s (謝志堅) view that major global container shippers have reached a consensus to raise freight rates to help drive up profits.
“I expect the container shipping industry to rebound moderately this year under these better operating conditions,” Hsieh told reporters in mid-February.
Market researchers also said Evergreen Group’s decision to lease 10 mega-vessels from Korea Infrastructure Investments Asset Management Co, which are scheduled to begin entering service in the fourth quarter of next year, indicated that the company might expect a rebound for the industry in the near future.