Taiwanese carrier Yang Ming Marine Transport slipped into the red in the second quarter of the year as container freight rates sank.

The Taipei-listed company logged a net loss of TWD 0.13bn ($4.27m) for the three months to the end of June — massively reversing a TWD 55.6bn ($1.7bn) profit in the same period last year.

“The maritime industry in the first half of the year was impacted mainly by inflation and uncertainty in the global economy,” the company said.

“Additionally, freight rates declined compared to the same period last year, leading to a decrease in revenue compared to the corresponding period last year.”

Revenues slumped by around two-thirds to TWD35bn ($1.15bn), down from TWD 109bn in the same period last year.

The carrier suggested that overall momentum for economic recovery over the next two years still appears relatively weak.

Container shipping supply is forecast to grow by 8.5% this year, surpassing the demand growth of 1.4%, it said.

The oversupply was a result of high inflation, weaker household purchasing power and ongoing inventory liquidation within industrial chains, it said.

However, once the Russia-Ukraine conflict comes to an end, the need for reconstruction materials during the post-war recovery period is expected to boost container shipping demand, the company added.

“In response to the changes in supply and demand in the shipping market, Yang Ming will continue to assess the situation with utmost care.

“ The company will also be attentive to global economic developments, geopolitical influences, changes in supply chains, and environmental sustainability requirements, among other trends.

Fleet renewal

“There will be timely and necessary adjustments to route distribution and fleet planning to increase the Company’s competitiveness and operating performance.”

For the first six months of the year, Yang Ming managed to report a profit of TWD 3.4bn ($107.04m) and revenues of TWD 72bn ($2.36bn).

The company is renewing its fleet and is buying three neo-panamax boxships from their Japanese owner for about $102m each.

The 14,000-teu YM Wellbeing (built 2018), YM Wellspring and YM Warranty (both built 2019) have been purchased for between $302m and $310m.

Yang Ming has used the vessels for its services as part of THE Alliance, which operates together with Germany’s Hapag-Lloyd, Japan’s Ocean Network Express and South Korea’s HMM.