News / Liners are not hoarding capacity, assures Evergreen, as Q1 profits triple

Photo: © Yali Shi | Dreamstime.com

Evergreen general manager Wu Kuang Hui has hit back at speculation that liner operators are hoarding capacity to drive up rates.

At a shareholder meeting on Tuesday, he said: “In this current market, there’s no reason for operators to hide capacity.

“Long-term contractual commitments for our transpacific services have reached 50%. As the market’s effective shipping capacity decreases, Evergreen will continue to adjust its fleet and improve operational resilience to cope.”

The carrier’s Q1 24 net profit of $537m was more than triple that of a year ago, shareholders heard.

But Mr Wu warned that the container shortage was becoming acute. He said: “Customers must play their part in returning empty containers promptly, or additional charges could be levied.”

And he admitted that liner operators’ exceptional earnings had been beyond expectations.

He said: “Shipping capacity is still oversupplied, but the geopolitical benefits have extended from Q1 to Q2, and we can be optimistic about the Q3 peak season; but the actual degree of prosperity still needs time to be seen.

“The Red Sea crisis has exacerbated port congestion and the highly efficient Singapore port is facing bottlenecks now.”

Mr Wu noted that while consumption was growing, there were still economic risks for carriers.

The IMF has predicted economic growth for the US, Europe and China this year and Mr Wu said: “The US economy is performing well, and the European economy continues to recover. Although China is affected by the real estate crisis, various stimulus measures have been introduced and various market indicators have improved, which is conducive to the healthy development of the shipping market.

“But on the other hand, the Russia-Ukraine war, the Middle East conflict, the Red Sea crisis and the delay in US interest rate cuts have had a negative impact on global economic growth,” he added.