Yang Ming Marine Transport Corp (陽明海運), the nation’s second-largest container shipper in terms of fleet size, said it expects business this year to improve quarter-by-quarter amid recovering demand.
The container shipping sector has maintained relatively higher freight rates, especially for routes to Europe, since the beginning of this year, thanks to strong seasonal demand before the Lunar New Year holiday.
“The business in the first quarter this year will be slightly better than the same period last year,” Yang Ming chairman Frank Lu (盧峰海) told reporters yesterday.
Lu said it is still challenging for the company to return to the black this year, as demand on routes to both the US and Asia faded after the holiday.
There are two factors that are key to container shippers’ near-term prospects, he said.
One is whether the freight rates remain at the current levels, and the other is whether the Transpacific Stabilization Agreement’s (TSA) plan to raise its general rate by US$300 per 40-foot equivalent unit (FEU) from next month can be successfully executed, he said.
However, Lu said he is not that worried about the oversupply issue for this year because major container shippers are likely to scrap more ships this year than last year, after they take delivery of more large vessels with higher efficiency later this year.
The global container shipping sector retired a total of 68,138 twenty-foot equivalent units (TEUs) of capacity last month, accounting for 0.3 percent of overall capacity in the sector, compared with 461,298 TEUs scrapped for the whole of last year, Lu said, citing data from Alphaliner, a research institute for the container shipping sector.
Other than the container shipping business, Yang Ming will also leverage Kao Ming Container Terminal Corp (高明貨櫃碼頭) — its container terminal operator subsidiary in Kaohsiung Harbor — to raise its profitability this year.
Kao Ming, in which Yang Ming holds a 47.5 percent stake, is to see its second-phase construction completed in June and begin operations in September.