News / Evergreen chief says huge investment in new box ships will pay dividends

Evergreen president Eric Hsieh has defended the carrier’s decision to invest heavily in newbuilds, particularly a 2019 order for a dozen 24,000 teu containerships when freight rates were depressed.

Mr Hsieh told shareholders the delivery of the ships, between now and 2023, was well-timed to benefit from the current spike in freight rates.

He said the ships, under construction at Samsung Heavy Industries, Hudong-Zhonghua Shipbuilding and Jiangnan Shipyard, would be deployed on Asia-Europe routes, strengthening the Taiwanese carrier’s market share in this lane.

Four  are expected this year, with the first hitting the water by the end of this week.

Mr Hsieh said: “Evergreen will closely observe market trends and changes and adjust its strategy accordingly. This year, we will take delivery of 33 newbuildings of more than 260,000 teu, growing our capacity by 18%. In the next three and a half years, 42 new ships will be delivered, adding more than 550,000 teu to our fleet.”

In terms of container supply, in line with market demand and fleet expansion plans, Evergreen has been pro-active in ordering new containers and arranging container leases. This year, including rented containers, Evergreen expects to receive 420,000 teu.

Linerlytica analyst Tan Hua Joo told The Loadstar the Taiwanese liner operator would have the fourth-largest fleet of ultra-large containerships of over 18,000 teu,  behind MSC, Cosco and Maersk, adding: “These ships will have the lowest unit costs on the Asia-Europe trade, and it’s evident more such ships will be ordered by the other carriers who want to match the cost economics on the trade. Operators are bringing forward vessel order plans to pre-empt price increases and also to secure earlier delivery slots.”