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Yang Ming hit by freight rate decline

Yang Ming hit by freight rate decline
Substantial declines in freight rates and excessive tonnages hit Taiwanese shipping company Yang Ming Marine Transport last year resulting in a net loss of T$15.8bn ($501m) compared with the profit of T$547mm a year earlier.

Yang Ming hit by freight rate decline

Substantial declines in freight rates and excessive tonnages hit Taiwanese shipping company Yang Ming Marine Transport last year resulting in a net loss of T$15.8bn ($501m) compared with the profit of T$547mm a year earlier.

The company"s operating revenue slid 45% to T$74.5bn during the period compared with T$137.8bn in 2008.

Global container shipment demand significantly contracted during the period due to the global financial crisis. A 50% decline in freight rates on Europe, Asia and the US routes and overcapacity in the global shipping market caused the loss last year, the company said in a statement.

To cope with the downturn, Evergreen Marine employed a string of measures last year in order to reduce excessive tonnages, including scrapping old vessels, postponing new vessel delivery and returning charter-in vessels, and strictly controlling terminal operation expenses, the company said.

However this was not enough to offset the decline in container operation income, which fell by T$42.6bn, the company said.

Separately, the company"s dry bulk affiliate Kuang Ming Shipping recorded net profit of T$1.5bn last year against T$953m in 2008.

Yang Ming Marine Transport predicted average freight rates on major routes would bottom out this year and expected global shipping demand to rebound by 7.3% and 6.5% in 2010 and 2011, respectively. The company said it planned to open new routes and enhance operational efficiency in an effort to turn return to the black in 2010.

www.turkishmaritime.com.tr

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