Evergreen Marine Corp Monday gave an upbeat outlook for this year as the global container shipping industry begins to recover from a downturn.

“We are anticipating a turnaround this year, as the industry is bottoming out,” Evergreen Marine chairman Anchor Chang said during a news conference in Taipei.

Container shipping industry recovering: Evergreen

Long-declining freight rates began to recover last quarter across major routes, with demand remaining robust during the lean season, Chang said, adding that the company’s earnings are expected to improve along with a recovery in other industries as well as overall economic growth momentum.

US west coast freight rates average about US$1,700, up from US$800 a year ago, while those for the east coast have improved from US$2,000 to US$3,200, Evergreen Marine president Lee Mong-jye said.

“There has been a sea-change across the container shipping industry, and carriers are beginning to realize that cutthroat price competition is unsustainable,” Chang said, adding that clients have learned that the financial strain on shippers have impacted service quality.

Falling freight rates have resulted in the collapse of one of Evergreen’s major rivals, while five other have resorted to consolidation, Chang said, noting that the development would help trim excess capacity.

Shippers have begun to favor second-hand vessels rather than commissioning orders for new ships, Chang said. He added that the Ocean Alliance, of which Evergreen Marine is a member, would commence operations in April.

The alliance is expected to snap up 36.2 percent of the market share for major long-haul routes between Asia and the US, Asia and Europe, the Middle East, and Europe and the US, larger than the 27.2 percent held by the 2M Alliance composed of Maersk Line and Mediterranean Shipping Co, Chang said.

Source: Taipei Times