Fri, Jun 14, 2013 - Page 13 News List

Evergreen Marine to implement cost control measures

By Amy Su  /  Staff reporter

Despite facing challenging supply-and-demand conditions this year, Evergreen Marine Corp (長榮海運) still aims to return to the black, or at least break even, by implementing cost control measures and grasping every possible opportunity to raise fright rates, a company official said yesterday.

Evergreen Marine, the nation’s largest container shipping firm in terms of fleet size, further expects to cut the cost of filling containers by 10 percent by the end of this year from last year.

“The [fate of the]container shipping market will be determined by the clients this year, not by the shippers,” Evergreen Group (長榮集團) vice chairman Bronson Hsieh (謝志堅) told a media briefing.

Although the global economy showed a mild recovery this year and demand in the container shipping industry improved slightly, some firms have acquired new vessels, expanding transport capacity, Hsieh said.

Citing data from a global container shipping industry observer, Hsieh said the industry’s supply side is expected to rise 7 percent this year, with transport volume showing a 2 percent to 3 percent increase.

The oversupply issue made it challenging for container shippers to raise freight rates last month, failing to fuel momentum in the second quarter — the traditional peak season for the industry, Hsieh added.

That made cost controls, such as cutting costs of filling containers or cutting dock idling charges, become more important for Evergreen Marine to maintain its profitability this year, Hsieh said.

Meanwhile, Evergreen Marine president Anchor Chang (張正鏞) said the company’s plan to take delivery of about 40 new vessels over the next three to four years may help control costs.

Most of the new vessels are about 8,000 twenty-foot-equivalent units (TEUs), with better energy efficiency and are able to be used on various routes, Chang added.

In addition, Evergreen Marine will not give up on the possibility of raising freight rates and imposing bunker surcharges, Chang said.

The shipper will also aim to develop its business in emerging markets in Latin America and Southeast Asia, as demand in these regions may undergo relatively steady expansion.

The company posted NT$1.84 billion (US$61 million), or NT$0.53 per share, in net losses in the first three months, compared with a net loss of NT$3.14 billion, or NT$0.9 per share, recorded a year earlier.

Evergreen Marine is to hold its annual shareholders’ meeting today.

The company does not plan to distribute a dividend to shareholders, based on its net profit of NT$128.53 million, or NT$0.04 per share, recorded last year.

Evergreen Marine shares rose 0.31 percent to close at NT$16.25 on the main bourse yesterday, compared with the TAIEX’s 2.03 percent tumble, stock exchange data showed.

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