Taiwan’s Yang Ming is bullish about long-haul ocean freight rates as it embarks on fleet expansion, said chief commercial officer Kevin Lee today.
On Friday, Yang Ming announced the purchase of three 8,000 teu boxship newbuilding resales from Shoei Kisen Kaisha, the ship-owning affiliate of Japan’s Imabari Shipbuilding. They will be delivered between 2028 and 2029, marking Yang Ming’s first step in a plan to acquire 13 new ships, ranging from 8,000 to 15,000 teu.
Yang Ming’s net profit hit a record high of $2bn in 2024, rocketing from 2023’s $153m, as the Red Sea crisis sent freight rates to levels not seen since Covid. Revenue increased to $6.94bn, from $4.5bn in 2023.
Six of the new ships will be 8,000 teu and the rest 15,000 teu.
Notwithstanding the downward trend in long-haul rates, which saw a temporary reprieve days ago, Mr Lee said he was hopeful of a pick-up in cargo volumes going into the second quarter.
He said: “We of course cannot ignore the impact that US tariffs will have, and we’ll continue to observe. The Red Sea crisis is ongoing and all shipping lines are maintaining the detours round the Cape of Good Hope. Major European ports remain seriously congested and these uncertainties will continue into Q2, so we’re hopeful.
“We’re confident of securing higher contract rates for the transpacific this year, although the uncertainties will mean fluctuations in spot rates. We won’t resume Red Sea transits unless we’re 100% assured that it’s safe to do so. Even if these transits resume, it won’t be an overnight complete return to the Red Sea, so these factors will also have an impact on freight rates.”
He declined to disclose the proportion of contract business against spot volumes, citing commercial sensitivities, but Mr Lee acknowledged that US tariffs against China, Mexico and Canada had added uncertainty to the market.
He said: “Many exporters will diversify their shipments. Manufacturing in China is already branching out to South-east Asia and India. It will be hard to predict how cargo volumes will be affected. We need to observe the extent of the impact of tariffs on global trade.”
Mr Lee also dismissed analysts’ perceptions that Yang Ming’s hesitation to build ships beyond 20,000 teu shows the company is prioritising transpacific services over the Asia-Europe trade, where larger ships are the main workhorses.
He said: “The size of the ships we order depend on our route planning and alliance arrangements. We haven’t ruled out building ships of more than 20,000 teu in future.”