9 October 2023 (Lloyd's List) - TAIWAN’S largest container carrier Evergreen Line has expressed concern about persistent oversupply in the container market, foreseeing more challenges in the final quarter and the coming year amid sluggish global economic growth and rising geopolitical tension.
Evergreen Marine, which owns most of Evergreen’s containers, posted revenue of NT$72.8bn ($2.3bn) in the third quarter, up 8% compared with the second quarter. But January-September revenue fell 60% year on year to surpass NT$207bn. It did not disclose profits.
Cargo volumes on multiple shipping routes are low as the global economy continues to grapple with high inflation and interest rates.
Evergreen Marine Corp president Hsieh Huey-Chuan told an investor meeting he expected supply to outpace weak demand in the fourth quarter, despite potential benefits from the school return, Thanksgiving and Christmas.
“Our performance in the fourth quarter will likely be weaker compared with the third quarter,” Hsieh said.
Falling freight rates after the end of the lockdown-led boom have hampered the peak season for container shipping this summer and autumn.
Hsieh said he was cautious about the coming year. Supply would outstrip demand amid limited global economic growth and the EU Emissions Trading
System tax taking effect in 2024.
“Unless significant events occur on the demand or supply side that can reverse the imbalance, 2024 will remain a challenging year,” Hsieh said.
Hsieh said he expected the US market would experience cargo growth if the Federal Reserve cut interest rates as expected.
He was less optimistic for the European and Chinese markets, citing ongoing challenges in Europe due to a weak economy, as reflected by PMI figures often below the 50 threshold this year, and an increase in new vessel deliveries.
“China has not yet overcome the negative impacts of the zero-Covid policies,” he said, adding falling Western demand and lingering effects of zero-Covid policies have put China’s exports under pressure.
The post-pandemic shipping market was also confronted with geopolitical tensions, which had resulted in a restructuring of supply chains.
