Demand could pick up before the Lunar New Year holiday, but the outlook for shipping rates remains murky, Yang Ming Marine Transport Corp (陽明海運) told an online investors’ conference yesterday.
Average shipping rates slid to US$2,607 per twenty-foot equivalent unit in September from a peak of US$3,417 in February, and rates might continue to remain low this quarter given a number of adverse effects, Yang Ming said.
"Shipping rates continue to consolidate at low levels this quarter amid the relatively weak demand for cargo transportation as the market is still affected by the impacts of strong inflation, high inventory levels, excess shipping capacity and economic recession," chief financial officer Peter Su (蘇育文) said. "It remains to be seen whether the imbalance between supply and demand will improve next year."
Photo: CNA
However, there are signs that rates could rebound ahead of the Lunar New Year holiday next month, as Yang Ming has received more orders and its load factor improved this month from the previous two months, chief commercial officer Frank Chang (張紹豐) said.
"The outlook for shipping rates would be clearer after the Lunar New Year holiday in January, depending on factory capacity in China and Southeast Asia," Chang said.
Nonetheless, Yang Ming said it is conservative about the first half of next year due to economic uncertainties.
In comparison, the company is relatively upbeat about the second half of the year, due to several positive factors, including inventory corrections and central bank rate hikes coming to an end, and declining energy prices in Europe, it said.
Demand in the US and Europe is expected to rebound at the fastest rate next year, while it could remain flat in Asia due to this year’s high comparison base, it added.
Europe accounts for 43 percent of Yang Ming’s revenue, followed by the US at 34 percent and Asia at 23 percent, company data showed.
Yang Ming’s net profit in the first three quarters of this year totaled NT$165.86 billion (US$5.4 billion), up 50.95 percent from a year earlier, with earnings per share of NT$47.5, while revenue in the first 11 months grew 20.11 percent annually to NT$359.57 billion, the data showed.
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