News / Evergreen chief warns of USWC congestion as demand for ocean capacity grows

Evergreen chairman Chang Yen-yi said today US west coast ports, particularly LA and Long Beach, were expected to become more congested next month, as more liner operators were adding capacity amid rocketing freight rates.

Mr Chang said at the corporation’s annual meeting that the Taiwanese shipping line was optimistic that freight rates would remain high all the way to September, as shippers rushed to take advantage of the 90-day pause, from 12 May, in the US-China tariff war.

Currently, about 200,000 teu of ships are at North American anchorages, but Mr Chang believes vessel queues will increase as liner operators deploy more vessels to meet demand.

He said: “By the end of June, freight levels will reach levels we saw earlier this year. With the suspension of US-China tariffs, cargo owners are eager to resume shipments and, this month, spot freight rates have gone up rapidly.

“We [liners] can’t mobilise enough ships to meet the substantial spurt in demand, so freight rates will continue rising. We’re optimistic about the usual peak season, from August to September.”

As to concerns of tariffs after the grace period, Evergreen management said it did not believe President Trump would ignore American consumers and persist with the “exorbitant tariffs” on Chinese imports.

During the meeting, the company announced a dividend of TW$32.50 ($1.09) per share, with 2024 net profit up more than three-fold from 2023, at TW$139.45bn ($4.25bn).

Shareholders said that, in expectation of higher earnings, the corporation should disburse dividends quarterly, instead of yearly. However, management said the shipping market remained uncertain amid geopolitical tensions, and it would adhere to an annual disbursement to maintain cashflow.

Executives added that future economic trends would depend on the policymaking of major economies and changes in the global trade environment.

The International Monetary Fund had lowered its forecast for global economic growth this year, from 3.3% to 2.8%, and the global economic momentum had slowed down, said the company.