Taiwan’s three major shipping companies achieved growth in May
The cargo volume of Taiwan’s three major shipping companies all achieved month-on-month growth in May. Mainly benefiting from the recovery of some markets around the world, the strategy of flexible delivery of capacity has worked. Recently, Taiwan’s three major shipping companies, Evergreen Shipping, Yang Ming Shipping, and Wan Hai Shipping, all announced their latest revenue data for May, and all three companies achieved month-on-month growth in revenue. In May, Evergreen’s revenue was approximately $747 million, an increase of 2.6% from April, and a year-on-year decrease of 60.8%. Yang Ming’s revenue was $378 million, a month-on-month increase of 4.8% and a year-on-year decrease of 65.82%. Wan Hai’s operating revenue was approximately $267 million, an increase of 0.52% month-on-month and a decrease of 67.41% year-on-year.
According to reports, the cargo volume of Taiwan’s three major shipping companies also achieved month-on-month growth in May. The growth is mainly due to the recovery of some markets, and the new capacity strategy has worked. Due to sluggish global demand, shipping costs plummeted. In the first quarter of 2023, the performance of all three shipping companies is very poor. Evergreen’s revenue was $2.17 billion, a year-on-year decrease of 61.0%. Net profit was $160 million, down 95.0% year-on-year. Yang Ming’s revenue was $1.22 billion, a year-on-year decrease of 65.0%. Net profit was $110 million, a sharp drop of 94.0% year-on-year. Wan Hai’s operating revenue fell 68.0%, the largest drop among all shipping lines, while it posted a loss of $70 million.
However, as the market showed signs of recovery in April and May, the world economy and demand have improved. The three shipping companies are still relatively optimistic about the market prospect. The latest economic outlook data also shows that the global economy in 2023 may be better than expected. In the latest global economic outlook released by the World Bank in early June, both raised their global economic growth forecasts. The World Bank predicts that the global economy will grow by 2.1% in 2023, an increase of 0.4% from the forecast at the beginning of the year, but still lower than the 3.1% in 2022. The World Bank said the reason for the upward revision was mainly due to the fact that major economies such as China were more resilient than expected.
Regarding the current situation, Yang Ming said that the economic and trade development in the Asia-Pacific region is still full of potential and will help boost global economic growth. Wan Hai Shipping points that if geopolitical tensions ease, inflation continues to fall, and destocking has achieved results in recent months, it will help shipping companies improve their performance. The market is very optimistic about the current economic changes, and the expectations for the second half of this year are very high. Especially after the Covid-19, various countries have lifted various restrictions, and international trade will gradually resume after the inventory is consumed.
The market generally expects that the market will improve significantly in the second half of 2023 and maintain the traditional peak season. According to data, U.S. retail sales in the first and second quarters of 2023 will drop by 23% and 16% respectively compared with the same period in 2022. The decline in the third quarter was 7%. It is expected that U.S. retailers will replenish inventory around August and prepare for new orders for holidays such as Christmas at the end of this year. It is expected that the volume of products in the fourth quarter may increase year-on-year. However, the current shipping market has a relatively large capacity and has entered a new round of capacity delivery, so the pressure on capacity supply will continue to increase in 2023 and 2024. At the same time, the recent escalation of labor disputes at the West Coast of the United States may have a certain impact on the operation of US ports. These uncertain factors will also determine the market trend this year. Totally, the shipping market has a very strong momentum this year. Excluding some external factors, the overall trade volume this year should increase.
