Taiwanese container line Yang Ming Marine Transport Corp., the state’s No. 2 and now the world’s ninth largest box carrier, may be merged with other lines or with state-run Taiwan International Port Corp. (TIPC).
The Ministry of Transportation and Communications is said to be considering combining Yang Ming Marine and TIPC as part of reform measures to help the floundering maritime sector recover.
TIPC was put up in 2012 to oversee the port operation and management of Kaohsiung, Keelung, Taichung, and Hualien.
The ministry held a meeting recently on possible measures to salvage debt-ridden Yang Ming, which has recorded a loss of US$408 million in the first three quarters of this year, according to media reports.
Lawmakers have suggested the merger with TIPC, as Yang Ming has been in the red since 2009.
Analysts said a merger with compatriot Evergreen is going to be difficult because the state controls 33% of Yang Ming while Evergreen is privately held. Moreover, the two lines belong to different alliances: Yang Ming is part of THE Alliance, while Evergreen has partnered up with members of the Ocean Alliance.
They further opined that unless Yang Ming agrees to a merger, it will be hard put to overcome the harsh conditions of today’s shipping environment, since it needs at least twice its present capacity to withstand the impact of low freight rates, overcapacity, severe competition, and weak global shipping demand.
Currently, all eyes are waiting for the next move of the mid-level carriers still not involved in mergers or acquisitions—Yang Ming, Hong Kong’s Orient Overseas Container Line, South Korea’s Hyundai Merchant Marine (HMM), and Israel’s Zim Integrated Shipping Services—following the massive series of consolidation that has taken place this year.
Zim has reportedly tapped Citi to find a buyer for its global trade routes so it can concentrate on its intra-Mediterranean operations. In South Korea, the government is determined to revive ailing HMM following the demise of the country’s flag carrier Hanjin Shipping. Meanwhile, OOCL is mum on rumors of acquisition by Cosco or Evergreen.
The three leading carriers of Japan, NYK Line, K Line, and Mitsui O.S.K. Lines, bared last October their plans to merge, subject to shareholder and regulatory approval.
Earlier this month, Maersk Line announced signing an agreement to acquire German container shipping line Hamburg Sud, subject to final agreement and regulatory clearance.
Photo: Kürschner
