Yangming Shipping: There is little hope for the recovery of the container market in 2024

Peter Su, chief financial officer of Yangming Shipping, said at an investor conference on September 20 that the peak season in the third quarter of this year was "disappointing" and did not expect it to be better in 2024.

Su Yuwen pointed out that the third quarter of the year is usually the "peak season", the third quarter of the cargo volume is higher than the first half of 2023, but due to the weak economy in the United States and Europe, the peak season performance of the main routes still does not meet expectations, which indicates that demand has not fully recovered, and the downward pressure on freight rates still exists.

"Even intra-Asian freight rates are falling as China's economy weakens and capacity continues to oversupply with little prospect of improvement, requiring further market monitoring," he added.

Despite the upward revision of growth figures for some economies by major international financial institutions, the global economy remains Mired in high inflation and rising interest rates, and supply-demand imbalances persist. This means that as developed markets such as Europe and the United States also begin to enter the off-season for shipping, freight rates will continue to adjust downward.

Based on these factors, Yangming Shipping is pessimistic about business growth in the fourth quarter.

When asked about the capacity adjustment, Su Yuwen replied that Yangming Shipping is studying how to adjust the company's routes.

He said: "The first half of 2023 has been mixed across all routes. Trans-pacific freight rates adjusted faster in the first half of the year, but rebounded in the third quarter. Shipments before the National Day were lower than expected, and the supply and demand imbalance on Asian routes in the third quarter. "

The allusion, he explained, was to the increasing use of slow sailing to absorb extra shipping capacity. "We are not optimistic about the traditional slow season in Europe and the United States in the fourth quarter. Only by observing the trend of supply and demand can we adjust the course. Eleven ships will now be deployed on one route, whereas previously 10 ships were normally deployed."

In January this year, Yangming Shipping ordered five 15,000TEU container ships from Hyundai Heavy Industries, which are expected to be delivered in 2026. Until then, Yangming Shipping's capacity will remain stable, he added.

"Until then, we won't have any new ship deliveries and have no plans to decommission old ships."

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