Yang Ming Hints at Entry to the 24,000 TEU Boxship Club

Yang Ming Marine Transport's management has indicated that the company will soon join the ranks of 24,000 TEU boxship owners.

During a shareholders’ meeting following the release of the Taiwanese liner operator’s 1Q 2024 results, GM Patrick Tu mentioned the competitive advantage provided by 24,000 TEU ships on the Asia-Europe routes, which currently belong to their fellow THE Alliance members.

Tu highlighted the need for Yang Ming to consider newbuilding orders as part of their medium- to long-term strategy.

The other members of THE Alliance are HMM and ONE, while Hapag-Lloyd is set to leave the group to form the Gemini Cooperation with Maersk Line in February 2025.

Linerlytica analyst Tan Hua Joo has said that THE Alliance members are likely to begin commissioning newbuildings earnestly following Hapag-Lloyd's announcement of its departure, which will leave the alliance with 2.5 million TEUs, making it the smallest container shipping alliance.

Currently, Yang Ming does not operate any ships larger than 15,000 TEUs. In contrast, ONE has six 24,000 TEU ships and HMM has twelve.

Yang Ming is in the process of building five 15,500 TEU ships at HD Hyundai Heavy Industries, scheduled for delivery in 2026.

In March, ONE announced plans to increase its fleet to 3 million TEUs by 2030, while HMM revealed in April that it aims to expand its fleet to 1.5 million TEUs by the same year.

This expansion could potentially allow ONE to overtake Hapag-Lloyd and narrow the gap with COSCO Shipping Lines.

Tan noted that Yang Ming would need to order at least 12 ships to independently run an Asia-Europe service. This move is seen as inevitable since Yang Ming is the only Top 10 carrier, apart from Zim, that does not operate ships of this size and cannot continue to rely on partners’ tonnage.

Given the current China-Taiwan tensions, Yang Ming will likely look to shipyards in South Korea and Japan to fulfill these orders.

Yang Ming’s net profit tripled year-on-year to US$298 million in 1Q 2024, and Tu expects 2024 to mark the company’s fifth consecutive profitable year.