The nation’s major container shipping companies aim to return to the black this year by deepening cooperation. This collaboration comes at a time when the companies are aiming to find a balance between continuous service expansion and capacity control, and dealing with the oversupply issue that has plagued the industry this year.
Yang Ming Marine Transport Corp (陽明海運) — the nation’s second-largest container shipping firm in terms of fleet size — yesterday announced the launch of a joint service with Evergreen Marine Corp (長榮海運), Pacific International Lines Pte Ltd of Singapore and Sinotrans Container Lines Co Ltd (中外運集裝箱運輸) of China.
The joint service on routes to Taiwan, China and Australia will be effective from June 7, operated by six 4,250 twenty-foot equivalent unit (TEU) container vessels.
Earlier this month, Evergreen Marine, the nation’s largest container shipper, upgraded its service network in South America in partnership with Wan Hai Lines Ltd (萬海航運), Pacific International and COSCO Container Lines Co Ltd (中遠集裝箱運輸) of China.
South America is forecast to see strong economic growth this year, which supports Evergreen Marine’s strategy of expansion there, the company said.
The recent intensive cooperation between major container shippers indicates that they expect sales to rise during the second quarter — a traditional peak period for the industry.
It also signifies that the companies may have more opportunities to raise freight rates successfully if they have better control over supply, further pursuing stronger profitability for this year, Capital Securities Corp (群益證券) said in its latest report.
Evergreen Marine plans to implement a rate restoration program on June 3 for trades from Far East and Indian sub-Continent to the Mediterranean region, by raising the rate by US$650 for a twenty-foot equivalent unit.
Given the strategy of cooperation between major Taiwanese container shippers, Capital Securities expects the trend in average freight rates for long-haul routes to remain slightly above the break-even point this year.
That may further support the nation’s three major container shippers to return to the black this year, reversing their weak sentiment for the first quarter, the report said.