Taiwan-headquartered shipping line Yang Ming is looking to expand its regional routes in light of increasing geopolitical tensions and global supply chain challenges.
The ocean carrier gave the outlook following the release of its full-year performance where it saw a surge in profit last year. Yang Ming's revenue totaled US$6.94 billion in the last fiscal year, up from US$4.51 billion in 2023. Net profit after tax surged to US$2 billion from US$153 million, driven by Red Sea diversions and emerging Asian markets.
"The company delivered strong operational performance and profitability throughout the year," Yang Ming said.
It noted that in 2024, the container shipping industry experienced a net capacity increase of approximately 3 million TEUs, leading to supply growth outpacing demand.
"Amid this challenge, factors such as vessel rerouting due to the Red Sea crisis and congestion at key ports helped absorb excess capacity. Additionally, the robust economic performance of emerging Asian markets contributed positively to global economic growth," it said.
Yang Ming added that the first three quarters of 2024 were marked by favorable market conditions with rising cargo volumes and freight rates.
Looking ahead, the ocean carrier cited the International Monetary Fund's (IMF) January 2025 World Economic Outlook (WEO), projecting a global economic growth rate of 3.3% for 2025. On the supply side of the shipping sector, it said Alphaliner's latest analysis forecasts a 5.7% increase in shipping capacity and a 2.5% growth in demand for 2025.
However, Yang Ming noted that "significant uncertainties" continue to affect the global trade outlook.
"Key risk factors include U.S. tariff developments, which may lead to potential inflationary pressures due to rising operational costs and impact economic growth and trade activities," the carrier said.
It added that the recent halt of the Israel-Hamas ceasefire agreement has also increased uncertainties regarding carriers resuming operations in the Red Sea.
Most carriers also continue to reroute via the Cape of Good Hope to mitigate security risks. "Drewry's January report suggests that once transit routes through the Red Sea resume, carriers may accelerate the scrapping of older tonnage to align with normalized demand."
Environmental policies for maritime industry
Meanwhile, Yang Ming noted several environmental policies set to take effect that would impact the outlook of ocean carriers, including the European Commission's Fit for 55 initiative implementing the EU Emissions Trading System (EU ETS) for shipping in 2024, which requires carriers to submit carbon allowances based on their vessels' CO₂ emissions.
Yang Ming said with the commencement of FuelEU Maritime in 2025, carriers face the challenge of meeting GHG intensity thresholds or paying penalties.
The regulation sets lifecycle greenhouse gas (GHG) emission intensity standards for marine fuels, with progressively stricter thresholds every five years. The International Maritime Organization (IMO) is also considering a GHG emissions levy on the shipping industry starting in 2027, highlighting the need for a transition to sustainable fuels.
"In response to the evolving geopolitical landscape and global supply chain challenges, Yang Ming reaffirms its commitment to strengthening its core business, enhancing existing alliances, and exploring new collaborative opportunities," the Taiwan-based ocean carrier said.
"The company is accelerating its regional route strategy and penetrating emerging markets to refine its global service network," it added, noting that Yang Ming currently continues to optimize fleet deployment to improve operational efficiency.
It said that following the Board's internal review of environmental regulations and the development of alternative energy technologies, Yang Ming has advanced its vessel optimization plan for deploying up to thirteen vessels. The plan includes up to six 8,000 TEU-class dual-fuel-ready vessels and up to seven 15,000 TEU-class LNG dual-fuel-fitted vessels.
"This deployment is expected to strengthen Yang Ming's core business, mitigating energy risks across the fleet, and maintain flexibility in future vessel types and fuel options," Yang Ming said.
