Evergreen Marine President Wu Kuang-hui addressed a shareholder meeting on Tuesday (May 28), noting shipping overcapacity in the first half of the year and expressing optimism for a turnaround in the 3Q peak season.

Wu detailed Evergreen Marine’s revenue according to routes operated in 2023, noting that U.S. routes accounted for 42% of revenue, Europe for 26%, Asia for 19%, and other routes for 13%. Wu said the current capacity utilization of each route rate is more than 90%, per CNA.

Wu said annual contract freight rates in North America have shown a slight upward trend this year. Long-term contract cargo volume accounted for about 50% to 60% of capacity, European long-term contract prices have experienced increases depending on the negotiation schedule, and long-term contract cargo volume accounted for 20% of capacity.

As for the near-term outlook, Wu said the international freight index shows a change in market supply and demand, though Evergreen’s income is not expected to see major fluctuations. This is due to risk control mechanisms such as long-term contracts.

A few shareholders expressed concern about incidents on the Red Sea and the impact on shipping capacity. Wu said these incidents have caused port congestion in Europe and Singapore, leading to excess capacity on European routes.

Wu added that shipping companies are not deliberately manipulating shipping capacity given the current environment of high freight prices. Wu said Evergreen will adjust its fleet and improve operational resilience to respond to these challenges.

Wu said shipping companies detouring around the Red Sea have led to a shortage of containers due to extended shipping schedules. Evergreen typically leases containers for five to seven years, but it may be reconsidered as there may be more benefits to building containers than renting.

Source: Taiwan News