Yang Ming Marine Transport Corp (陽明海運) yesterday gave a rosy outlook for the first half of this year on expectations that container shipping rates would remain high.
A combination of a shortage of empty containers and traffic congestion at ports worldwide due to the COVID-19 pandemic is expected to keep freight rates high until the end of June, Yang Ming president Patrick Tu (杜書勤) told an investors’ conference in Taipei.
Yang Ming is Taiwan’s second-largest container shipper by fleet size.
Photo: Wang Yi-hung, Taipei Times
It has negotiated new annual long-term contracts for its routes from Asia to the US with some of its clients, Tu said, adding that contract rates and capacity ordered by clients rose from a year earlier.
Yang Ming’s operations from Asia to the US made up 42 percent of its total revenue last year, followed by its operations in Europe with 32 percent and Asia with 26 percent, company data showed.
The shipping industry has had an oversupply problem over the past few years, but the issue would be resolved this year, Tu said, citing forecasts by maritime research firms such as London-based Drewry Shipping Consultants Ltd and Clarkson PLC.
Drewry has forecast that supply for container capacity would grow 4.5 percent this year and demand would rise 8.9 percent, while Clarkson projected a 3.8 percent gain in supply and 5.4 percent rise in demand, Tu said.
Whether Yang Ming would sustain its profit momentum in the second half of this year is still unclear, as it would depend on the pandemic and fuel costs, Tu said.
Overall, Yang Ming is optimistic about turning a profit, he said.
The company yesterday reported an average freight rate of US$1,140 per twenty-foot-equivalent unit (TEU) at the end of last year, up 50 percent from US$759 a year earlier, while its average fuel cost dropped 31 percent annually to US$321 per tonne.
Asked if the Suez Canal being blocked by the MV Ever Given container ship has affected Yang Ming’s operations, Tu said two Yang Ming vessels have turned south to sail around the Cape of Good Hope.
Although the change in course would add seven to 10 days to the shipping time, Yang Ming would not need to compensate its clients according to global maritime law, he said.
Yang Ming shares rose 3.68 percent to NT$35.25 in Taipei trading yesterday.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales