Taiwan Freight Forwarder Warns Supply-Side Woes Worsen Due to Dual Crises

Freight forwarding company Taiwan Freight Forwarder (2636-TW) held an earnings briefing today (19th). CEO Yen Yi-Tsai stated that this year’s market conditions are 'light at the beginning, heavy at the end,' with the first quarter marking the bottom. Although supply growth still exceeds demand growth, actual available capacity has decreased. 'Supply-side challenges are compounding, and high freight rates will persist through the end of August without issue,' he said.

Taiwan Freight Forwarder explained that this year is defined by supply exceeding demand. Any market upturn would stem from event-driven factors (such as geopolitical issues) or structural shifts (climate change, El Niño). Currently, both types of factors are occurring simultaneously and intensifying, which is why freight rates continue to rise.

The company further noted that passage through the Panama Canal now prioritizes higher bidders, compounded by Red Sea rerouting, port congestion, high fuel prices, and rising insurance costs for carriers. 'Carriers have no incentive to operate at a loss,' Taiwan Freight Forwarder said. The company's operational focus for the second half centers on improving gross profit margins.

In the first half, Taiwan Freight Forwarder completed a 100% equity investment in Shih-Chou International and acquired the remaining 10% minority stake in THI Japan, making it a wholly-owned subsidiary. Looking ahead, Taiwan Freight Forwarder believes that new vessel deliveries, geopolitical tensions, and changes in trade policies will impact supply-demand dynamics and route configurations. Freight rates, influenced by capacity control, peak-season demand, and regional imbalances, may experience常态化 volatility. The company will adjust profitability accordingly and continue advancing regional investments and capital increase initiatives.