In 2019, ever-changing global economics took a toll on the shipping market. Alphaliner statistics indicated that over 1,000,000 TEU were delivered in 2019, the second lowest in the past decade. The number of recycled ships declined significantly in 2019, as a result total space increased by 4% compared with 2018. Particularly, the Far East-European route contributed a 4.8% increase due to the delivery of large new-builds. As no front loading containers were scheduled in response to high tariffs, shipments in the Pacific route dropped in 2019 compared with those in 2018, even although there were more blank sailings conducted. The average freight rate rebounded by the imposition of emergency fuel surcharges at the end of 2019. However the annual average freight rate was still lower than 2018.
In response to the above changes in the shipping market, Evergreen plans to take the following measures:
- Continue to provide customers with better direct shipping services by improving space utilization and lowering transshipment costs under the framework of OCEAN Alliance.
- Continue to manage capacity and optimize fleet deployment.
- Cut the inland transportation ratio in the United States and utilize vessel space and container equipment efficiently to reduce container supply factor.
- Install scrubbers in the fleet in line with the new regulations of using low-sulfur fuel and impose a low-sulfur fuel surcharge starting from the end of 2019 to reflect costs.
- Set the goals and cost monitoring mechanisms for revenue, freight, shipments, and contracts.
Since global population continues to rise amid the increasing popularity of free trade agreements, global trade demands are expected to increase in the future. As one of the important members of shipping, Evergreen aims to provide sufficient space to meet customer requirements by building new eco-friendly ships while enhancing our quality of service through shipping alliances, cloud technology, and network platforms to promote smooth global operations.
The IMO low sulfur rules, which will take effect on January 1, 2020, could have an impact on some ships sailing at sea at the end of 2019. To this end, we installed exhaust scrubbers and imposed a low-sulfur fuel surcharge on some routes. Regarding climate risks, we use the Weather Navigation Information (WNI) System to strictly monitor extreme weather such as typhoons, and take measures such as slow speed for late arrival, skip calling, change the port berthing sequence in response. Evergreen demonstrates its commitment to sustainable development with concrete actions. In 2019, we signed the "Declaration of Refusal to Sail the Arctic Circle" to support the "Protecting the Arctic" initiated by the Ocean Conservancy and Nike.
As the world's leading container transportation and shipping company, Evergreen shoulders the responsibility for promoting corporate citizenship in addition to providing quality services across the globe. With our corporate social responsibility centered on the aspects of environment, society and governance (ESG), we expect ourselves to strive toward the mission and vision of corporate social responsibility with concrete action.
To secure long-term viability, Evergreen is striving toward the Sustainable Development Goals, which are the blueprint centering on environmental protection, social inclusion, and economic growth to achieve a better and more sustainable future for all. We have formulated the "Corporate Social Responsibility Best Practice Principles." The Corporate Social Responsibility Committee is also in place to be in charge of promoting CSR and sustainable development. The Corporate Social Responsibility Committee reports the results of CSR practice to the Board of Directors every year. In the face of global warming and climate change, Evergreen has referred to the Task Force on Climate-related Financial Disclosures (TCFD) to identify climate risks and opportunities and draw up corresponding management approaches. Please refer to 2.3.3 Risk Management and Response Measures for Climate Change.
To achieve corporate sustainability, we have set the following short, medium and long-term goals and strategies:
- Enhance joint cooperation and open up niche routes
- Optimize fleet deployment and strengthen core routes
- Invest in green ships and upgrade shipping equipment
- Control various costs and R&D of e-commerce
- Invest in strategic locations to build a global network
- Continue to upgrade the fleet to comply with environmental regulations
- Leverage digital platforms to develop smart transportation
- Strengthen industry-university cooperation to cultivate seafaring talent