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Yang Ming Sees Weaker Demand

Maritime Activity Reports, Inc.

November 14, 2019

Taiwanese ocean shipping company Yang Ming Marine Transport Corporation takes a hit with a net loss of about USD 42 million for the third quarter and sees signs of "weaker demand" in the container market.

Yang Ming said that according to analyst firm Alphaliner’s latest projections, annual capacity growth is forecast at 3.7% and global throughput growth for 2019 is estimated at only 2.5%, which suggests a softer market demand than was previously expected.

Meanwhile, the container shipping market remains vulnerable to trade uncertainties and geopolitical tensions. It is unclear the extent of potential impact those tensions and uncertainties will have on demand.

Despite unpredictable market conditions, Yang Ming has improved its volume and revenue largely due to the efforts of business strategy and competitiveness enhancements, it said.

"Looking ahead, the container shipping market will undoubtedly need to be prepared for continued world economic and trade volatility," Yang Ming said.

However, based on the data collected by Alphaliner, the estimated market demand growth at 2.8% is moving closer to the capacity growth at 3.3% in 2020. Furthermore, the containership orderbook-to-fleet ratio has fallen to its lowest recorded level at 11%.

In addition, due to the new IMO 2020 regulation that will enter into force next year, it is expected that the supply-demand gap will gradually narrow.

Started last year, Yang Ming already redelivered thirteen of its high-cost chartered vessels and there will be another five next year, coupled with its future newly-built containerships, Yang Ming’s operating cost will be greatly optimized.

Anticipating ongoing US-China trade disputes and a shift in the global supply chain, Yang Ming will continue to optimize its Intra-Asia service network.

With the addition of a new member joining THE Alliance in the upcoming year, the partnership will be poised to significantly strengthen its service portfolio and increase its competitiveness. The partnership which has been extended for another ten years will provide customers with greater stability and long-term commitment in the future.

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