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Yang Ming targeted for consolidation

Yang Ming targeted for consolidation

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Taiwanese politicians yesterday debated the future of the island’s second largest containerline, Yang Ming Marine Transport Corp, with calls for it to merge with other lines or possibly state-run Taiwan International Port Corp (TIPC).

With the dramatic consolidation seen across the container shipping sector this year, Yang Ming, which has lost $407m in the first three quarters, finds itself in a precarious position. Now the world’s ninth largest containerline with a fleet of 565,766 slots according to Alphaliner, Yang Ming needs to make some hard decisions about its future. To be a genuine global liner company in today’s altered container shipping reality a company needs to have at least twice the capacity Yang Ming controls. A merger with fellow Taiwanese line Evergreen is not simple for two reasons: first, the state controls 33% of Yang Ming and secondly, the two lines are heading into different alliances next April – Yang Ming into THE Alliance while Evergreen has signed up to the Ocean Alliance.

Politicians yesterday urged the Ministry of Transportation and Communications to merge Yang Ming with TIPC, the body that runs all the island’s ports.

Opposition politicians attacked the government’s plans announced last month to provide struggling Evergreen and Yang Ming with $1.9bn in emergency aid.

As it stands, among mid-tiered carriers left standing at the end of 2016’s mammoth round of consolidation attention is very much focused on Yang Ming, Hong Kong’s OOCL, South Korea’s Hyundai Merchant Marine (HMM) and Israel’s ZIM.

ZIM, Splash understands, has employed Citi to find a buyer for its global network whereby it will then focus on just the intra-Mediterranean trades.

In South Korea, the Korean government has vowed to back HMM as the nation’s flag carrier in the wake of the shock bankruptcy of Hanjin Shipping at the end of August.

Meanwhile, OOCL remains tightlipped on acquisition rumours with both Cosco and Evergreen linked to the Tung family controlled line. The line’s share price has jumped HK$3 to HK$34 since the start of the month as speculation about its future sparks investor interest.

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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