News / Wan Hai jumps on logistics bandwagon in 'challenging' freight market

Taiwan liner operator Wan Hai is to invest more in the logistics sector.

Chairman Chen Po-ting said the company needed to ensure stable revenue, because “the freight makerket appears challenging in the short term”.

Describing the move as a business transformation, Mr Chen said: “When the shipping business isn’t good, we’ll seek opportunities to move into air freight and land transport. Wan Hai has made profits by investing in terminals in Vietnam, India and other places.”

He said Russia’s invasion of Ukraine had affected economies in Europe and the US, exacerbating inflation and high interest rates, and he added that China’s post-Covid recovery was not as good as expected.

Mr Chen said: “We’re optimistic about the rise of India, Indonesia, Thailand and other ASEAN markets, and will seek business opportunities there.

“Wan Hai has continued to purchase ships, containers and terminals. These represent our future plans and we aren’t pessimistic about the future. That said, the geopolitical and economic situation has made us conservative about this year, and we think the container shipping market won’t be too good.”

It all represents a u-turn from last year, when Wan Hai’s management said it would not follow larger operators like MSC, Maersk and CMA CGM in acquiring logistics companies.

Drewry’s senior manager (container research), Simon Heaney, wrote recently: “Container shipping and logistics have very different operational and commercial imperatives; the latter demanding a level of customer-orientated service hitherto unseen in the liner arena. Past attempts to expand the scope of liner operators failed to meet expectations, but new technology offers hope that things might work out better this time around.”

Primarily an intra-Asia carrier, Wan Hai re-entered the transpacific lane in 2020 with services to the US west and east coasts, ordering and purchasing 13,000 teu containerships in the process.

Following the Covid-fuelled boom, Wan Hai fell into the red in Q4 22 and Q1 23, but refuted speculation that it could join other long-haul newcomers in withdrawing from the transpacific.

However, market observers suggest that Wan Hai’s investments in the large ships make it difficult for the liner to pull out from the transpacific in the short term.