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.
RECYCLE: Taiwan would aid manufacturers in refining rare earths from discarded appliances, which would fit the nation’s circular economy goals, minister Kung said Taiwan would work with the US and Japan on a proposed cooperation initiative in response to Beijing’s newly announced rare earth export curbs, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. China last week announced new restrictions requiring companies to obtain export licenses if their products contain more than 0.1 percent of Chinese-origin rare earths by value. US Secretary of the Treasury Scott Bessent on Wednesday responded by saying that Beijing was “unreliable” in its rare earths exports, adding that the US would “neither be commanded, nor controlled” by China, several media outlets reported. Japanese Minister of Finance Katsunobu Kato yesterday also
China Airlines Ltd (CAL, 中華航空) said it expects peak season effects in the fourth quarter to continue to boost demand for passenger flights and cargo services, after reporting its second-highest-ever September sales on Monday. The carrier said it posted NT$15.88 billion (US$517 million) in consolidated sales last month, trailing only September last year’s NT$16.01 billion. Last month, CAL generated NT$8.77 billion from its passenger flights and NT$5.37 billion from cargo services, it said. In the first nine months of this year, the carrier posted NT$154.93 billion in cumulative sales, up 2.62 percent from a year earlier, marking the second-highest level for the January-September
‘DRAMATIC AND POSITIVE’: AI growth would be better than it previously forecast and would stay robust even if the Chinese market became inaccessible for customers, it said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its full-year revenue growth outlook after posting record profit for last quarter, despite growing market concern about an artificial intelligence (AI) bubble. The company said it expects revenue to expand about 35 percent year-on-year, driven mainly by faster-than-expected demand for leading-edge chips for AI applications. The world’s biggest contract chipmaker in July projected that revenue this year would expand about 30 percent in US dollar terms. The company also slightly hiked its capital expenditure for this year to US$40 billion to US$42 billion, compared with US$38 billion to US$42 billion it set previously. “AI demand actually
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
RSS