News / No staff cuts at Yang Ming – 'it would be too harsh to lay off employees now'

Photo: © Philippilosian Dreamstime.com

Taiwan’s liner operators won’t follow Maersk in implementing massive staff cuts, said Yang Ming president Patrick Tu on Monday.

On Friday, after slipping into the red for Q3, Maersk confirmed another 3,500 jobs would go, bring its total headcount cut to 10,000.

Mr Tu pointed out that while Maersk had invested in 3PL companies as part of its strategy to become an integrator, Yang Ming and many others had not.

He said: “The labour costs of each company are different. Maersk has invested quite a lot in logistics, so the number of lay-offs looks scary. None of the Taiwanese shipping companies has such large-scale lay-offs. It would be too harsh to lay off employees now. However, we respect each company’s business strategy.

“It isn’t just this year that the container shipping market has been in a downturn. The market has seen worse situations in the past. Companies will look at how to reduce costs and maximise profits, while waiting patiently for the next business turnaround.”

 Mr Tu believed this could take until 2027, and added: “The market will remain oversupplied next year, and it won’t be easy for freight rates to rebound significantly, and small recoveries are seasonal. Major operators should still be able to see profits this year.

“From an optimistic perspective, there might be improvement next year, but in the worst case scenario, recovery will only come in three or four years.

“Shipping is cyclical and, after the boom in 2021 and 2022, a correction is inevitable. This is the case in all industry cycles. I believe all shipping companies will watch the market and respond accordingly.”

Yang Ming incurred a net loss of $4m in Q2 23, resulting in cumulative profit for the first half of standing at $107m.