Taiwan Shipping in Troubled Water?
Taiwan's shipping lines aren't looking quite so young and fresh as they were earlier, reports Bloomberg.
While the global container industry has embarked on a spree of pairings and menages-a-trois over the past 12 months, Taiwan's shipping lines have remained proudly single.
Taiwan's major three - Evergreen Marine Corp., Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. - have kept aloof from the fray.
Taiwan has offered its main container shipping lines a relief package to keep them afloat amid worst-ever trading conditions.
Taiwan's transportation ministry has offered Evergreen Marine and Yang Ming Marine Transport, the main shipping conglomerates, a US$1.9bn relief package including a credit line with preferential interest rates.
The move comes after several Chinese and Korean shipping companies have collapsed, while Japan’s big three shipping conglomerates have agreed to merge their container shipping operations, a report in FT said.
Just 12 months ago, Evergreen had Asia's largest container fleet, and was the fifth-biggest operator worldwide. It's now been relegated to third place in the region after tie-ups between the major Chinese and Japanese lines, and is depending on a $1.9 billion government relief package to keep itself above water.
Yang Ming has some overlapping trans-ocean routes that could be eliminated to increase market muscle, but its finances make even Evergreen's overstretched balance sheet look attractive.
Wan Hai has a better model -- taking business at commercial rates, limiting itself to less-competitive intra-Asian routes and posting just three quarters of operating losses over the past five years.
But it's hard to see what such a well-run company would want with a bloated giant like Evergreen, and its fleet isn't big enough to move the needle in an industry where scale is everything.
