Insurance claims on the rise with box ships forced to brave Cape weather
There has been a prolific rise in weather-related cargo loss and insurance claims since carriers ...
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Yang Ming has joined its liner peers in diverting ships from the congested Panama Canal to the Cape of Good Hope route as transit restrictions increase.
The Taiwanese mainline operator said on Monday the diversions would up the voyage time for its Asia-US east coast service to 91 days from the usual 84.
And on reports that THE Alliance, of which Yang Ming is part, will impose a surcharge to manage the rising costs of the longer sailing, management confirmed today any surcharge would be independently decided by each alliance member – antitrust regulations mean alliance members cannot discuss rates and surcharges among themselves.
From January, only five neopanamax boxships will be able to transit the Panama Canal each day, down from eight currently.
However, Yang Ming president Patrick Tu said “the tonnage overhang remains severe” and even with rerouting via the Cape of Good Hope, demand-supply equilibrium was not expected until 2025.
He added: “We believe newbuilding deliveries will see new highs in the next two years, before bottoming-out in 2025.”
The container shipping market also remains plagued by high retail inventory in the west, geopolitical tension and inflation that has affected consumer spending, he said.
“Market uncertainties will persist in H1 24 and our outlook requires a conservative approach,” said Yang Ming’s chief administration officer, Caroline Chiu.
Asked if the recent outbreak of respiratory ailments in China could lead to another round of logistics bottlenecks, Mr Tu said: “Our shipments to and from China remain smooth and we haven’t seen any impact yet.”
He added that Yang Ming, the ninth-largest liner operator, did not plan to scrap any of its ships, although old vessels would be replaced, possibly by purchasing vessels already on long-term charter.
The market remains in favour of shippers and contract negotiations for 2024 were taking longer than expected, said Mr Tu.
“Discussions for Asia-Europe contracts haven’t been completed and only 30% to 40% of transpacific contracts have been concluded.”
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