While much of the recent focus in liner shipping has been on the creation of the P3 alliance and the ramifications should it gain regulatory approval, according to research group Alphaliner, Taiwanese carrier Evergreen should be garnering equal attention.
There was a time, during the 1990s, that the steadfastly independent container line was the world’s largest, but as others pressed forward with fleet expansion programmes, Evergreen gradually began to drop down the list, to find itself at number seven last year.
This was largely a result of its decision in 2004 to refrain from ordering new vessels, believing that prices were too high – a decision most would consider correct, given the problems that some carriers, such as Zim, have had with ill-timed orders.
However, after a six-year hiatus, Evergreen founder Chang Yung-Fa announced in 2010 that the company would invest a staggering $5bn in 100 new ships. In fact, since that announcement, 45 have been ordered, almost half of which have already been delivered – enough to have a significant effect on the market, according to Alphaliner.
The consultancy has calculated that Evergreen’s slot capacity has risen by just under 30% since January 2012, increasing from 607,000teu to 806,000teu following the delivery of 19 8,500-8,800teu L-type vessels and one 13,800teu unit, as well as some chartered tonnage.
The effect has been to take it from a market share of 3.8% of global capacity at the beginning of last year to 4.6% this month.
And the rate of its fleet expansion is set to increase, Alphaliner notes.
By the end of next year, it is scheduled to take delivery of another 13 L-type and nine 14,000teu vessels, an additional 235,000teu of slot capacity which would take Evergreen’s market share up to 4.7% by the end of this year and 5.4% by the end of 2014.
This will have a dramatic effect on the capacity offered in its services, and possibly in the trades it operates – although as a carrier that has largely remained outside alliance arrangements, the ultimate effects remain difficult to discern.
Nonetheless, Alphaliner’s calculations suggest that the carrier’s operational capacity on its Asia-North Europe and Asia-Middle East/Indian subcontinent service will increase by 19% next year; on its services into Africa by 41%; on its intra-European service by 50%; on its Asia-South American services by 61%; and on its service between Asia and Australasia by a breathtaking 301%.
And there appears little Evergreen can do by way of fleet reduction, given that the carrier has relatively few vessels on charter, with only a handful of agreements due to expire in 2014, and its opportunities for scrapping are limited to ten 4,230teu ships that were built in 1993 and 1994 and which are likely to be made redundant by cascading.
Evergreen: the carrier to watch in 2014 says Alphaliner
According to the analyst Alphaliner, the Taiwanese carrier Evergreen's capacity expansion has already had a significant impact on the market in the last two years, even though the newbuilding tally since 2010 has reached only 45 ships, short of its 100 ship plan.
From a low of 3.8% in January 2012, Evergreen’s capacity market share has risen to 4.6% as of November 2013 as its operated capacity has risen from 607,000 teu to 806,000 teu over the same period. Evergreen has already taken delivery of 19 units of 8,500-8,800 teu and one 13,800 teu ship since August 2012, resulting in a capacity up of 176,000 teu. The shipping company also retained most of its chartered fleet during the last two years. The pace of new vessel deliveries will pick up until December 2014, as Evergreen will receive 235,000 teu of additional capacity comprising split between 13 ships of 8,500-8,800 teu and nine 14,000 teu vessels.
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