Yang Ming, Evergreen win state support to maintain national champion status — Panjiva
MENU

Panjiva_research_logo

Yang Ming, Evergreen win state support to maintain national champion status

Corp - Shipping 735 Financing 94 Mode - Containerized 1173 Mode - Seaborne 1494 Taiwan 141 U.S. 4200

The government of Taiwan has implemented a TWD 30 billion ($1 billion) state aid package for the shipping industry via government loans, targeted to Yang Ming and Evergreen Marine. That’s come as part of a larger package supporting the transport industry that has prioritized the airline industry. Nonetheless, the government has stated that “in the next few months, global container volume may decrease by as much as 30%“, indicating that pressure on the two container-lines is set to continue.

As outlined in Panjiva’s research of May 14, Yang Ming has already carried out a capital increase to support its finances. The government’s loans may help obviate the need for further increases. The application of state aid may lead other countries to implement similar plans and / or launch trade policy infraction investigations given the subsidies may in particular help Taiwanese exporters.

Panjiva’s data shows that shipments Evergreen and Yang Ming represented 42.0% and 12.2% respectively of exports from Taiwan to the U.S. in the 12 months to April 30. That’s a similar level to that in 2016 but is a marked improvement for Evergreen from its 37.8% share in 2018. 

Notably, Yang Ming’s shipments from Taiwan to the U.S. jumped 10.2% year over year in the first four months of 2020 while those handled by Evergreen were broadly unchanged. That rebuilding of market share may have come at the expense of lower shipping rates.

EVERGREEN’S GROWTH INTERRUPTED BY COVID-19

Chart segments U.S. seaborne imports from Taiwan by container line on a monthly and three-month average basis. Source: Panjiva

Major exporters from Taiwan to the U.S. will face reduced logistics planning uncertainty as a result of the financing package. Indeed, the financing may allow Yang Ming and Evergreen to increase their competitiveness on such lanes. 

Major users of their competitors’ services on Taiwan-to-U.S. lanes outside the logistics sector include auto parts makers Tong Yang, which shipped 3,290 TEUs with a wide range of container-lines in the 12 months to April 30, and Yamaha’s motor division which shipped 1,600 TEUs with Ocean Network Express. Others include plastic and rubber makers LCY and Cheng Shin Rubber with 1,640 TEUs and 1,580 TEUs respectively.

ONE, COSCO MAY BE BIGGEST TARGETS FOR RESURGENT EVERGREEN, YANG MING

Chart segments U.S. seaborne imports from Taiwan by container line and shipper in the 12 months to April 30, denominated in TEUs. Source: Panjiva

Copyright © 2020 Panjiva Supply Chain Intelligence, a product offering from S&P Global Market Intelligence Inc. All rights reserved.