Yang Ming Marine Transport Corporation will receive TW$8 billion (US$269.41 million) from the Taiwanese government’s recently announced financial assistance for the shipping industry.
Through the Ministry of Transportation and Communications and the National Development Fund, the Taiwanese government has a 45% stake in Yang Ming.
Yang Ming’s chief financial officer Ho Hsiu-chi said on 9 June that the TW$8 billion will be a low interest loan, at a rate of between 1.1% and 1.5%, with interest for the first year to be subsidised by the government.
The governments of France and South Korea have also given low-interest loans to CMA CGM and HMM, respectively, while Pacific International Lines is negotiating a similar bailout with the Singapore government’s investment company Temasek Holdings.
Yang Ming chairman Bronson Hsieh acknowledged that while the Covid-19 pandemic has made the market challenging, he sees some bright spots.
Alphaliner estimates containerised cargo volumes will contract by 8.8% in 2020, before increasing by 6.8% in 2021.
Hsieh pointed out that the collapse in oil prices has made very-low sulphur fuel oil (VLSFO) much cheaper, therefore easing the burden on liner operators.
Idled vessel capacity is now at an all-time high and Yang Ming has idled some ships. Operators are inclined to idle ships if the cargoes do not fill at least 80% of the slots.
Yang Ming’s business chief, Chang Shao-feng, said that while China is resuming manufacturing activities, Europe and the US remain badly affected by Covid-19, and this is hurting consumption. THE Alliance, which Yang Ming is part of, plans to keep capacity reduction at 25%-30% during Q3 2020, which is traditionally the peak season for container shipping.
By Martina Li
Asia Correspondent
