Evergreen spends $532m to boost its holdings in box terminals

Release date: 2024-02-04
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Evergreen spends $532m to boost its holdings in box terminals

Evergreen general manager Wu Kuang-hui said this week that container shipping would continue to feel the impact of the Red Sea crisis and the drought-afflicted Panama Canal for at least a few more months.

He said: “Supply-demand dynamics and vessel arrivals have been distorted by the Red Sea crisis and the Panama Canal drought. This will persist for at least a few months and accordingly, vessel turnaround will face upheavals. So this year, the market can expect dramatic changes, and we have to tread with caution.”

And the upcoming negotiations with the International Longshoremen’s Association on the US east coast, as well as the US presidential election, will add more uncertainty in the market.

Mr Wu, who took over as GM in December, was speaking as Evergreen announced TW$16.7bn ($532m) of investments, including the acquisition of more shares in terminal assets in Taipei and Colombo ports.

Yesterday, Evergreen announced the $12.8m purchase of an additional 5.84% stake in Taipei Port Container Terminal Co, its joint-venture with compatriot peers Yang Ming and Wan Hai, bringing its individual holding in the JV to 33.69%.

It also acquired a 5% stake in South Asia Gateway Terminals, which runs a facility in Sri Lanka’s Colombo port, for $19.8m, and is taking over its Italian affiliate, Italia Marittima (formerly Lloyd Triestino), paying €405m ($438m).

Mr Wu said that the acquisitions would reduce Evergreen’s operating costs and boost its competitiveness.

He also noted: “The shipping market has changed a lot since the start of the year, and it should be treated with caution. First of all, the situation in the Panama Canal and the Suez Canal have not had a good solution. With the Red Sea voyage increasing by about 20-30 days, and the number of ships needed to move cargoes will increase simultaneously. This will cause considerable pressure on vessel scheduling, which is a problem that shipping companies must face in the near future.

Mr Wu continued: “Secondly, because of chaotic schedules, the speed of terminal operations will be affected, and the number of days of container usage will also be extended. Box lines must thus pre-empt equipment shortages.”

Mr Wu noted that the existing remuneration contract of the International Longshoremen’s Association for US East Coast port workers expires on 24 September and invariably, there will be threats of strikes prior to the contract renewal.

He elaborated: “There may be controversial negotiations at any time, coupled with the presidential election in the United States in November, these variables will affect the supply and demand changes in the shipping market.”

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