Yang Ming Marine Transport Corporation said it will continue to optimize its intra-Asia operations anticipating that the ongoing US-China trade dispute will persist.
Yang Ming currently operates in 18 sites in Asia including Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Macau,
Malaysia, Myanmar, Pakistan, Philippines, Singapore, Sri Lanka,Taiwan, Thailand, and Vietnam.
The Taiwanese ocean shipping company reported that its consolidated revenues for the third quarter totalled NTD 37.78 billion (US$ 1.22 billion) with a net loss after tax during that period at NTD 1.38 billion (US$ 44.43 million) although business volumes increased by 1.99% year-over-year to 1.44 million TEUs
Yang Ming said its third-quarter results were impacted by its strategic decision to not exercise options with respect to certain formerly chartered vessels which resulted to incurred obligations under the charter parties estimated at NTD 1.39 billion (US$ 44.75 million) — lowering an otherwise profitable quarter, it said.
"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," it said in a statement.
"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," it added, referring to South Korean shipping line Hyundai Merchant Marine (HMM).
Trade war jitters
Citing analyst firm, Alphaliner’s latest projections, Yang Ming said 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, it noted that 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 shipping firm said the container shipping market will undoubtedly need to be prepared for continued world economic and trade volatility.
IMO regulation compliant
However, it said that 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.
"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," Yang Ming said.
Updating on its fleet's compliance, Yang Ming said starting last year, it already redelivered thirteen of its high-cost chartered vessels and there will be another five next year, coupled with its future newly-built container ships, Yang Ming’s operating cost will be greatly optimized.