Evergreen Marine to step up CKYH alliance cooperation

HONG KONG (Reuters): Evergreen Marine Corp (Taiwan) Ltd. said it has agreed to strengthen cooperation with CKYH-the Green Alliance, whose members include China COSCO Holdings Co Ltd, on Asia-Europe and Asia-Mediterranean trade lanes from the second quarter of 2012.

Analysts said the move would help the Taiwanese container ship operator and its partners compete with new alliances formed between AP Moller-Maersk’s Maersk Line and CMA CGM, and the G6 Alliance of six container shipping companies, amid an industry downturn.

Shares of Evergreen Marine rose 5.3 per cent on Wednesday but are down about 43 percent this year amid a slowing global economy and an oversupply of ships.

The Taiwanese container ship operator said in a statement that all parties aimed to enhance the frequency of service loops, the expedition of delivery terms and full-scale port coverage in their services.

Evergreen would not join CKYH-the Green Alliance, whose members are China COSCO, Japan’s Kawasaki Kisen Kaisha Ltd. or “K” Line, Taiwan’s Yang Ming Marine Transport Corp and South Korea’s Hanjin Shipping Co Ltd.

The majority of the ships operating on twelve service loops between Asia and Europe would range in capacity from 8,000 twenty foot equivalent units (TEU) to 13,000 TEU.

“The alliances will help stabilise freight rates in Asia-Europe trade lanes in the long term,” said JihSun Securities analyst Rita Hsueh in a research report on Saturday. “However, freight rates should continue to be weak unless liners actively cut their capacity.”

Maersk said last month that its container shipping arm fell into the red in the third quarter and was expected to continue to record a loss for the remainder of the year amid weak freight rates.