By Dexter Murray
Another Evergreen Vessel Stranded
Nearly a year after a cargo ship owned by the Taiwanese shipping company Evergreen Maritime Corp. caused a six-day-long traffic jam in the Suez Canal, another Evergreen ship has run aground off the U.S. coast. The ship, called the Ever Forward, hit ground on March 13 in Chesapeake Bay, near Baltimore. The ship is not interfering with the routes of other vessels and has not leaked pollutants. Dredging work has begun to free the ship from the mud, although it may take weeks before the vessel is freed. As of the end of March, the cause of the incident remained unknown.
Despite its latest mishap, the future of Taiwan’s largest shipping company looks bright. Increased demand and rising shipping rates mean that business is expected to follow an upward trajectory for the foreseeable future. In a rare move, Evergreen announced that it would reduce its paid-in capital for the first time in the company’s history. The 60% capital reduction means that NT$31 billion in surplus cash will be distributed to shareholders. As long as the company can avoid any more maritime misadventures, Evergreen shareholders will likely see continued increased returns in the years to come.
Taiwan Companies Affected By China Lockdown
Pandemic-related lockdowns in major Chinese cities have affected Taiwanese companies’ manufacturing operations in China. Notably, iPhone assembler Hon Hai Precision Industry Co., also known as Foxconn, was forced to suspend production at its Shenzhen sites on March 14 after the city recorded 66 new COVID-19 cases. Operations resumed a week later after city officials contained the spread of the virus. Other companies impacted by the Shenzhen lockdown included General Interface Solution Holding Ltd, Taiflex Scientific Co, and Globe Union Industrial Corp.
Shanghai authorities introduced a two-stage lockdown of the city on March 28 to control its largest outbreak since the beginning of the pandemic. Taiwan’s Minister of Economic Affairs, Wang Mei-hua, warned that Shanghai’s lockdowns could affect shipments from Taiwanese manufacturers operating in the city. However, TSMC, which runs an eight-inch wafer fab in the city’s Songjiang District, said it would comply with pandemic prevention measures but did not expect the lockdown to impact production.
As China struggles to contain outbreaks of the Omicron variant, subsequent lockdowns are expected to continue disrupting Taiwanese business operations in the coming months. These disruptions are likely to contribute to the ongoing reshoring of Taiwanese business that began with the U.S.-China trade dispute. Under President Tsai’s reshoring initiative, the Ministry of Economic Affairs has approved the return of more than 250 companies since the program’s launch in 2019.