Yang Ming Marine Transport Corporation (Yang Ming) has approved the procurement of five LNG dual-fuel container vessels as part of the company's sustainability initiatives.
The announcement came as Yang Ming held its 383rd Board meeting that also passed the company's Q1 2023 financial report.
In a statement, Yang Ming reported consolidated revenues in Q1 totaling NT$ 36.95 billion (US$ 1.22 billion) and a net profit after tax of NT$ 3.4 billion (US$ 112 million).
Yang Ming attributed its performance in Q1 to the ongoing global operating environment impacted by economic slowdown and geopolitical uncertainties.
"The demand in the global market registered a downward incline because of the ongoing war between Ukraine and Russia, the consecutive imposition of interest rate hikes by the U.S. Federal Reserve, and the current status of customer inventory, all of which stalled global economic recovery," Yang Ming said.
It added that the maritime transport market in Q1 also suffered delayed shipping and operational constraints due to the Lunar New Year holiday, factories adjusting shipping schedules, and manpower allocation driven by market demand.
"As a result, the revenues were reduced for the entire quarter. As different sectors gradually resumed business in March, there was a slightly increase in the overall operation volume and the operation remained positive in Q1," Yang Ming added.
Citing a report from Alphaliner, the Taiwan-based container shipping company noted that an oversupply still hold sway in the maritime transport market, with supply and demand growing respectively by 8.3% and 1.4%.
Regulations could impact future ships supply
As the supply of ships are still being impacted by the increasingly stringent international environmental regulations, it added that the world's maritime shipping operators comply with such laws by decreasing speed or expediting the replacement of old ships — which would help balance the supply and demand.
"In addition, with the IMO addressing issues concerning GHG emission goals and carbon reduction in the coming July, the supply of ships in the future could be impacted," Yang Ming added.
It added that according to Alphaliner's newest data from April 2023, around 4.4% of the world's container fleets lie in idle, gradually down from the recent peak of 6.4%, indicating "signs of recovery in the maritime transport market."
Yang Ming said the operational performance will be positively benefitted if the global supply chains' inventory absorption for the second half of the year can continue and the performance in the traditional peak season can be maintained.
However, it noted that given the uncertainties affecting the global maritime transport market such as geopolitics, regional economy, and international conservation laws, "due caution" and proper response are of utmost importance.
Meanwhile, in line with Yang Ming's global fleet deployment plan and the goal towards net-zero emission, it said that the board meeting also approved proceeding subsequent procurement procedures of five LNG dual-fuel container vessels, following the public and transparent international bid evaluation process.
"With these new ships, Yang Ming will be able to optimize its fleet allocation, enhance the fleet's overall competition, and operate more sustainably and environmentally-friendly by reducing energy consumption and carbon emission," it added.
