Evergreen (2603-TW) held its shareholders' meeting today (29) and reported a significant increase in cargo bookings for the U.S. routes following the 90-day temporary agreement reached between the U.S. and China on May 12. It is anticipated that by the end of June, space and cargo volumes will return to levels seen prior to April. In a less favorable scenario, freight rates could rise by the end of the third quarter, while in a more optimistic case, rates might continue climbing through to the fourth quarter.

Evergreen pointed out that geopolitical instability and drastic changes in the international trade environment present multiple challenges for the cargo shipping market this year. The International Monetary Fund (IMF) has revised its global economic growth forecast for the year down from 3.3% to 2.8%, indicating a slowdown in global economic momentum.

Regarding the impact of trade wars, Evergreen stated that with a reduction in tensions in U.S.-China trade relations, there has been a surge in cargo bookings for U.S. routes. By the end of June, it is expected that space availability and cargo volumes will recover to pre-April levels, subsequently boosting freight rates. Evergreen further noted that most of the current cargo is concentrated in Southeast Asia, and the company owns about 70-80 vessels under 3000 TEU, which positions them well to capitalize on growing opportunities in the Asian routes.

Due to a significant increase in market demand recently, adjustments to the fleet cannot be executed immediately, which suggests that freight rate levels are likely to continue rising. Traditionally, August and September see heightened shipping activity, and Evergreen maintains a cautiously optimistic outlook for market development. The worst case scenario predicts rates will rise by the end of the third quarter, while a better situation could see rates climb into the fourth quarter.

Evergreen currently operates a fleet of 227 vessels with a total capacity of 1,814,851 TEU, with another 53 vessels pending delivery. This year, a total of 21 vessels (total capacity of 207,571 TEU) are to be delivered, of which 7 new ships have been delivered as of May 28. Additionally, as environmental regulations become stricter, Evergreen emphasizes its willingness to consider new fuel options, including methanol dual-fuel vessels as well as LNG dual-fuel vessels. The company indicates that the most significant investment for shipping companies in the next 25 years will be in energy-efficient ships.