Taiwan has become the latest Asian shipping power to attempt to bail out its container shipping industry, as a glut of vessels and lacklustre trade growth continue to produce the worst-ever conditions in the industry’s 60-year history, reports The Financial Times (FT).
Taiwan's transportation ministry has offered Evergreen Marine and Yang Ming Marine Transport, the main shipping conglomerates, a US$1.9bn relief package including a credit line with preferential interest rates.
The move comes after several Chinese and Korean shipping companies have collapsed, while Japan’s big three shipping conglomerates have agreed to merge their container shipping operations, the report said.
A glut of huge new ships from Chinese and Korean shipyards and a sharp slowdown in trade growth has left lines struggling to fill their vessels — and has sent rates for moving containers so low that lines cannot cover their costs, the FT said.
The Taiwanese ministry told the paper the package would prevent “our shipping industry being affected by the global economic difficulty”. It would cut fees for docking and land rental, and extend to the industry a US$15.7bn bank lending scheme announced in 2015 that was to have concluded this year.
Ye Kung-don, professor of shipping management at National Taiwan Ocean University, said: “This is the first time the Taiwanese government has issued a package specifically for the shipping industry. It shows that the authority at least recognises the difficulties faced by the industry. Saving the giants will stabilise the whole industry.”