Topic of the week: Evergreen Orders 60,500 Containers Amidst Red Sea Crisis
Evergreen Marine Corporation, the seventh-largest container shipping line, has made a significant move to strengthen its container fleet by placing a massive order for 60,500 new containers at a cost of nearly $187 million. The order is a testament to the company's fleet growth and its need for more containers to meet increasing demand.
The containers will be sourced from three major manufacturers in China: CXIC Group, Guangdong Fuwa Equipment Manufacturing, and Dong Fang International, a unit of Cosco Shipping Development. This is Evergreen's second significant capital expenditure this year, following a $348 million order for six 2,400 TEU methanol, dual-fuelled ships in June.
The Red Sea crisis has driven container freight rates to unprecedented levels, and Evergreen's order is a response to this surge in demand. The company's net profit for the first nine months of 2024 has tripled to $3.5 billion, with revenue up 68% to $11 billion.
In related news, Evergreen has officially opened its new home base in Kaohsiung, Taiwan, with the launch of Terminal 7, the first fully automated container terminal on the island. The 149ha facility has five deepwater berths and can accommodate up to four 24,000 TEU ships at the same time, with an annual processing capacity of 4.5 million TEU.
The terminal, which took four years to build at a cost of approximately $1 billion, is a significant investment for Evergreen and the Taiwanese government, which contributed around $642 million to the project. The new terminal is expected to play a crucial role in Evergreen's operations and will help the company to better serve its customers in the region.
This massive order and the opening of Terminal 7 demonstrate Evergreen's commitment to expanding its fleet and capacity to meet growing demand in the container shipping market. The company's strong financial performance and strategic investments are expected to drive its growth and competitiveness in the industry.
Sea:
- Over the last two weeks China/East Asia to North America West Coast spot rates have decreased by 1.07% from $5,403/FEU to $5,345/FEU according to Freightos data.
- China/East Asia to North America East Coast spot rates have risen over the last two weeks, increasing by 3.3% to $5,395/FEU.
- Global container spot prices have risen over the last two weeks, and are now sitting at $3,612/FEU, a 8.9% increase over the last two weeks and a 212% increase from spot rates this time in 2023 according to the Freightos Baltic Index (FBX)
Air:
- Global Air Freight spot rates currently sit at $2.51, as rates continue to fluctuate according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $2.24 (100-3000kg), says FAX, increasing by 16%
- Europe to Asia, Greater China spot rates currently sit at $1.17 (100-3000kg), says FAX, increasing by 1.7%
That’s all for this week’s update…
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