Evergreen Marine Corp (長榮海運), the nation’s largest container shipping firm in terms of fleet size, expects profitability to improve this year, aided by better freight rates for Far East-Europe routes and cost controls.
Saying he could almost see “the light at the end of the tunnel,” Evergreen Group (長榮集團) vice chairman Bronson Hsieh (謝志堅) said he expects the container shipping business to strengthen in the third quarter, driving up sales and profitability for the full year.
Hsieh said that Europe’s stronger-than-expected recovery has bolstered demand on Far East-Europe routes, which account for about 20 percent of Evergreen Marine’s sales.
Most global container shippers have been cautious about raising freight rates for these routes because of the economic downturn in Europe over the past few years, but the recent pickup is giving shippers more chances to adjust rates, Hsieh added.
Indeed, major shipping firms have lifted freight rates on a monthly basis since April, with the next freight adjustment plan expected to be adopted next month.
Evergreen Marine chairman Anchor Chang (張正鏞) said the company plans to upgrade its fleet by adding 17 new vessels — between 8,500 and 14,000 twenty-foot equivalent units (TEU) — this year and retiring 12 smaller, less-efficient ships should help the firm save on fuel costs and improve profitability.
The formation of alliances between major global container shippers has also helped members lower costs, Chang said.
Evergreen Marine is a member of the CKYH alliance.
Alliance members are also able to share space, raising the load factor for a single vessel, allowing them to save on costs and offer faster service, Chang said.
Evergreen Marine is to hold its annual shareholders’ meeting tomorrow.
The company does not plan to distribute dividends this year, after posting a net loss of NT$1.5 billion (US$49.9 million), or NT$0.43 per share, last year.
Evergreen Marine shares slipped 0.9 percent to close at NT$16.50 on the main bourse yesterday, underperforming the TAIEX, which edged up 0.07 percent, Taiwan Stock Exchange data showed.
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