By Mike Wackett
Taiwanese ocean carrier Yang Ming is expected to post another net loss when it publishes its Q1 results, according to Alphaliner. This follows a net loss of TWD14.9 billion ($492 million) in 2016 and a deficit of $258 million recorded in the year before.
If the analyst is correct in its calculations, a Q1 loss, as many of its peers look likely to report a return to profitability, will do nothing to assist the perception of the container line in the eyes of anxious shippers and service providers, still reeling from last year’s demise of Hanjin Shipping.
The Loadstar has been told off the record by several UK shippers that they will not support the carrier until its financial position is resolved. Moreover, sources at service providers have told The Loadstar that although Yang Ming claims “business as usual”, it is being conducted with added caution.
In an earlier advisory targeting its service providers, the carrier said: “For the avoidance of doubt, Yang Ming has never made any demands to its vendors to either modify or terminate any existing obligations. Yang Ming is not in default of any vendor obligations, large or small.”
This advisory was issued in reference to suggestions that Yang Ming had contacted shipowners to renegotiate charter hire contracts, an almost unprecedented practice in shipbroking that was, nevertheless, used by negotiators for Hyundai Merchant Marine (HMM) and thereafter Hanjin. Alphaliner notes that shipowners Seaspan and its affiliate, CGI, have a charter exposure of 13 ships on hire to Yang Ming, with Greek owner Danaos having eight vessels on time charter to the carrier.
The contracted revenue of both of these containership owners was significantly impacted by payment arrears and charter defaults as a consequence of the bankruptcy of Hanjin.
In January, Yang Ming was identified in a research paper by Drewry Financial Research Services as a “red flag risk”, adding that the world’s eighth-largest carrier had “taken the slot left vacant by Hanjin”.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk).