Taiwan's Evergreen Marine Corp on Monday reported a fall of 19 percent in third-quarter net profit, joining other shippers in dwindling profits as expanding capacity hits freight rates.
Evergreen, the world's third largest container shipper, is likely to face increased pressure on profits in coming months as global supply of new ships outpaces demand, threatening to end a three-year boom fuelled by China trade.
"The market was booming in the second half of last year, which created a very high base. But this year, we've seen freight rates returning to more normal and healthy levels," Nieh Kuo-wei, Evergreen's spokesman, said by phone.
"Our third-quarter net profits have improved from the first and second quarters," Nieh said. "We are cautiously optimistic about freight rates in the fourth quarter."
Evergreen, which owns Taiwan's second-largest airline EVA Airways Corp, earned T$3.504 billion ($104 million) in July-September versus T$4.34 billion a year earlier, according to Reuters calculations based on the company's nine-month results.
Evergreen earned T$3.19 billion in the second quarter and T$2.97 billion in the first quarter.
Container freight rates between Asia and Europe have fallen 15 percent since last month, while the cost of shipping a twenty-foot-equivalent cargo from China to the US West Coast is 20 percent lower than a year ago. Evergreen earns 60 percent of revenue from shipping goods between Asia and the United States, with the rest split evenly between intra-Asia and Asia-Europe routes.