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Home News Intra-Asia operator TS Lines to further expand fleet as profits triple

Intra-Asia operator TS Lines to further expand fleet as profits triple

TS Lines’ net profit tripled to TW$6 billion (US$213.6 million), exceeding the Taiwan carrier’s previous expectations of TW$3 billion (US$106.8 million), as the container crunch sent rates soaring.

[s2If is_user_logged_in()]The intra-Asia carrier’s revenue increased 13% to TW$30 billion (US$1.07 billion) as it shipped 1.72 million TEU last year, up from 1.64 million TEU in 2019.

TS Lines CEO and Chairman, Chen Te-sheng, a former Wan Hai executive, said during his 40-year career, he has never seen freight rates reach such astronomical levels.

Freight rates for the intra-Asia trades, originally ranged between US$80 and US$150/TEU, shot up to US$800/TEU in Q4 2020, as the equipment shortage on long-haul routes spread to regional services.

TS Lines founder, CEO and Chairman, Chen Te-sheng.

Chen believes the situation in 2021 remains favourable to carriers, as congestion in European and US ports is perpetuated. He said this shows nothing is impossible and that the company is channelling current earnings to forward planning, in order to meet future challenges.

According to Chen the company began aggressively purchasing second-hand ships and commissioning newbuildings as charter rates increased substantially last year, and does not rule out acquiring more ships, the company now owns 24 vessels, more than half its 46 ship-fleet.

As asset values have appreciated significantly, charter costs are significantly higher, justifying a higher proportion of owned ships. It now costs US$20,000/day to charter a 2,700TEU ship, but if the vessel is owned, the daily costs are US$9,000, said Chen.

TS Lines has purchased seven second-hand ships for TW$3.8 billion (US$134 million) and two newbuilds will join the fleet this year. The company will also receive 11,000 new containers, which cost TW$900 million (US$31.74 million).

“We hope that these capital investments will negate high operating costs resulting from chartered vessels and leased containers in the next three years,” added Chen.”

Martina Li
Asia Correspondent

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