Better supply-demand to raise profitability: Evergreen official

By Amy Su  /  Staff reporter

Wed, Mar 20, 2013 - Page 13

Evergreen Marine Corp (長榮海運), the nation’s largest container shipping firm, expects better prospects in the second and third quarter — the seasonal peak for the industry — compared with a year earlier given improving supply-and-demand conditions this year.

The outlook will be even better if major container shippers manage to raise freight rates next month, a company official said yesterday.

“The company may see its business this year peak in the third quarter,” Evergreen vice chairman Bronson Hsieh (謝志堅) told a media briefing.

The global economic sentiment and the supply-and-demand issue will decide the container shipping industry’s trajectory, Hsieh said, adding that a mild economic recovery and a smaller gap between supply and demand could drive growth.

Citing the latest research by industrial research institute Alphaliner, freight volumes to Europe and the US could grow by 1 percent and 2.1 percent respectively this year, Hsieh said.

Given the flat growth in new supply, Hsieh said market conditions could reach a better balance this year, further helping major shippers’ sales and profitability.

In addition, major container shippers are considering raising peak season surcharges (PSS) next month to increase profitability. Usually, container shippers implement the surcharges in May.

If implemented, Hsieh said the move toward higher rates could signify a strong season in the second and third quarter.

He also expected Latin American and Southeast Asian markets to help drive up demand this year, forecasting that freight volumes to those regions would surge by between 5 percent and 10 percent.

Expecting significant growth in sales and profitability for the shipping industry in 2015, Hsieh said Evergreen would not miss any opportunities as it is scheduled to receive 23 new vessels between this year and 2015.

The company posted a net income of NT$104.15 million (US$3.5 million), or NT$0.03 per share, in the first nine months of last year, down from NT$266.8 million, or NT$0.08 per share, a year earlier.