Wan Hai chairman optimistic that the freight market will recover

Wan Hai Lines Chairman Chen Po-ting said at an event in Taipei on November 16, 2022 (Photo: Wang Yi-hung, Taipei Times)

Wan Hai Lines Chairman Chen Po-ting said at an event in Taipei last week that Wan Hai Lines will remain in the doldrums this quarter and upbeat next year, given the global economy. Demand may recover in the second quarter.

Chen's comments came as the transportation company reported a 25.8 percent drop in net profit in the third quarter and a 37 percent decline year-on-year to NT$22.35 billion (718.3 million dollars). The company's figures show revenue falling at a double-digit annual rate.

The president of the shipping line Wan Hai believes the freight market will kick in by mid-2023, when worries about Russia's invasion of Ukraine and Covid-19 will ease by then.

Since mid-year, payload rates have dropped from historically high levels and are expected to drop to their lowest levels seen before Covid-19 hit in 2020.

When asked about the company's year-end bonus policy, Chen said it's too early to say but the company will do its best to distribute bonuses accordingly.

“Overall, things aren’t as bad as what many people imagine. Today’s situation isn’t as bad as the 2008 global financial crisis. Now that it’s year-end, employees are wondering about their bonuses but we will do our best.”

Speaking at the event, Mr. Chen pointed out that the global economy is affected by three factors.

The first is the significant cost of substance use, because this is holding back consumption growth, leading to a reduction in container volumes. The second factor is the pessimistic psychology, and the third is the issues of geopolitics and epidemic prevention policies.

Mr. Chen said that the current overcapacity situation can be adjusted within the next 6 to 12 months.

Tran believes that worries about the Russia-Ukraine conflict and pandemic prevention measures will ease by 2023, when many economies are reopening and people are used to the impact of the conflict.

Speaking at the same event, Wan Hai general manager Tommy Hsieh said the company will remain profitable this quarter despite a 38% drop in annual revenue last month as prices fell and demand fell.

Hsieh said the company expects steady revenue growth because half of the contracts with customers in the US market are signed on infrastructure and are protected by fixed shipping rates.

He said Wan Hai Lines' year-end profit would be error-free, but did not give an exact estimate.

Wan Hai Lines posted a net profit of NT$93.11 for the first three quarters of the year, up 34% year-on-year, with a profit per share of NT$33.18.

The company said next year it will scrap two to four old ships, while it plans to receive 24 new ships with a total tonnage of 173,558 TEUs.

Source: Phaata.com (According to TaipeiTimes | ContainerNews)

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