Evergreen Marine Corp (長榮海運) on Tuesday said it expects a rebound in its cargo volume in the third quarter after facing an up to 20 percent plunge in the first half of the year due to the COVID-19 pandemic.
However, as uncertainties remain in the fourth quarter, the company’s annual cargo volume might fall 15 percent year-on-year for the whole of this year, the nation’s largest cargo shipper said.
While the pandemic has decelerated economic activity worldwide and weakened demand in the global container shipping market, Evergreen saw demand pick up earlier this month and has received more orders for next month and August, company chairman Anchor Chang (張正鏞) told a news briefing in Taipei.
Photo: Bloomberg
Summer is traditionally the cargo shipping industry’s peak season, as many suppliers transport their goods for clients ahead of product launches.
“The cargo volume in the third quarter is likely to be flat from last year, but it would be a decent performance considering the effects of the pandemic,” Chang said. “It is difficult to see annual growth in volume this year, as global trade declines and consumption slows due to lockdown measures.”
The world’s three major container shipping alliances — the Alliance, 2M Alliance and Ocean Alliance — have reduced their capacity amid the outbreak to address oversupply in the industry, which helps shippers maintain load factors and curb declines in freight rates, Evergreen executive vice president Patrick Wei (魏維德) said.
A reduction in capacity would have a mixed effect on shippers’ financial performance, as it would lead to a drop in revenue while saving their operational costs, such as fuel and labor costs, Wei said.
Most shippers in the past few months have performed maintenance on their idle vessels, while Evergreen has equipped its idle vessels with scrubbers to reduce emissions and meet new International Maritime Organization regulations, Wei said.
“It is questionable whether most shippers would continue trimming capacity in the fourth quarter when the cargo demand recovers, but if all shippers return to full capacity, the oversupply issue would emerge again,” he said.
For Evergreen, revenue generated from the Asia-Europe route and the Asia-US route accounts for 65 percent of its total revenue.
A second wave of COVID-19 in the West could complicate fourth-quarter visibility for cargo volume, he said.
The shipper has reported no infections among its crews, saying that it bars them from disembarking when arriving at any port and does not allow families aboard.
Evergreen also routinely takes its crews’ temperatures and orders them to self-isolate before boarding, it said.
The company added that it has extended contracts with crew members who could not return home due to border restrictions.
“This is a challenging year for shippers,” Chang said.
Evergreen reported a net loss of NT$441.3 million (US$14.89 million) for the first quarter, after revenue fell 4.86 percent year-on-year to NT$43.48 billion.
Net loss per share was NT$0.09 in the first quarter, compared with earnings per share of NT$0.12 a year earlier.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
UNCERTAINTY: Investors remain worried that trade negotiations with Washington could go poorly, given Trump’s inconsistency on tariffs in his second term, experts said The consumer confidence index this month fell for a ninth consecutive month to its lowest level in 13 months, as global trade uncertainties and tariff risks cloud Taiwan’s economic outlook, a survey released yesterday by National Central University found. The biggest decline came from the timing for stock investments, which plunged 11.82 points to 26.82, underscoring bleak investor confidence, it said. “Although the TAIEX reclaimed the 21,000-point mark after the US and China agreed to bury the hatchet for 90 days, investors remain worried that the situation would turn sour later,” said Dachrahn Wu (吳大任), director of the university’s Research Center for