News / Good year for box lines, says Yang Ming chief, but keep an eye on the market

18/07/2024

Yang Ming chairman Cheng Cheng-mount said liner operators would not resume Red Sea transits until the Houthis stop attacks on vessels.

At Taiwan’s 70^th Maritime Day celebrations last week, Mr Cheng said: “I don’t anticipate a ceasefire between Hamas and Israel any time soon, and shipowners will not risk the safety of their crews and vessels.”

However, he was optimistic that Q3 24 will be good for box lines, especially with the availability of ships and containers so tight – although, he added, the situation must be monitored week by week.

Yang Ming’s June revenue was up 67% year on year, to TW$20.72bn ($637.14m), 22% higher than in May, and in the first six months, turnover rose 34% year on year, to TW$96.39bn ($2.96bn).

Mr Cheng said: “Our June performance only reflected the freight rate in the previous two months. As the SCFI [Shanghai Containerised Freight Index] has risen for 13 consecutive weeks, to the beginning of July, it means the third quarter will be good.”

Mr Cheng also alluded to Drewry’s recent raising of its global container volume growth forecast for this year to 4.1% and the United Nations Trade and Development Organisation’s latest forecast that global GDP would grow by about 3% this year.

Showing its optimism, Yang Ming on 9 July ordered 9,100 containers from China International Marine Containers, at a cost of some $35m.

Meanwhile, at the celebration, Wood Chen, president of Taiwan’s International Ocean Freight Forwarders & Logistics Association, said shipping space was so tight that its members had been advised to book slots a month ahead to ensure smooth exports.

But Mr Cheng refrained from commenting on whether the peak season could end early, given that it had started prematurely.

He said: “Freight rates aren’t determined by liner operators, but by demand and supply. Geopolitics, trade barriers and inward-looking industrial policies may have a negative impact on the growth of international trade, so the market environment must be observed every week.”