Can you still buy shipping stocks now? Analyzing the true challenges and opportunities for Taiwanese and US shipping stocks based on data

Speaking of shipping stocks, many people have been asking recently: Is this a good time to bottom fish?

Shipping stocks (shipping shares) may seem simple, but they actually hide some secrets. These companies control the transportation hubs of global trade, responsible for moving raw materials, components, and finished products from one continent to another. The more active international trade is, the more lucrative shipping stocks become. But the opposite is also true—when the economy enters a recession, shipping stocks quickly turn around.

The True Situation of Shipping Stocks: From Peak to Trough

Let’s look at the data. The world’s largest shipping company, Maersk, peaked in early 2022, and now its market value has evaporated by 60%. Germany’s Hapag-Lloyd is not much better, retracing nearly 70% from its late 2022 high.

Even more heartbreaking are the financial figures. Maersk’s quarterly revenue plummeted from USD 22.767 billion in 2022 to less than USD 13 billion in Q2 2023, a decline of over 40%. Profits are even worse—halved from USD 8.879 billion in mid-2022 to USD 1.453 billion in 2023, an 83% decrease.

This is not just a story about stock prices but a deep adjustment across the entire industry.

Differences Between Taiwanese Shipping Stocks and U.S. Industry Leaders

For those interested in investing in shipping stocks, there are mainly a few options:

Taiwanese stocks: Evergreen (2603) and Yang Ming (2609). Evergreen owns over 200 ships with a total capacity of 1.67 million TEUs, mainly operating routes from the Far East to the Americas and Northern Europe. Yang Ming provides services at over 170 ports worldwide, with a capacity of over 700,000 TEUs.

U.S. stocks: Maersk (AMKBY), Hapag-Lloyd (HPGLY), and Orient Overseas (OROVY). Among them, Maersk is a giant in the industry, with an annual throughput of 4.18 million TEUs, operating in 130 countries.

The key difference lies here—Evergreen and Yang Ming’s routes heavily depend on the golden route from Far East to West/East Coast of the U.S., while Maersk’s routes are more globally diversified. This difference will become very important later.

Three Major Variables Affecting the Future of Shipping Stocks

First Variable: Economy and Interest Rates

The Federal Reserve currently maintains the benchmark interest rate at 5.5%. Once inflation stabilizes, a rate cut cycle will begin. As the global economy recovers, shipping stocks will have room to rebound. But if interest rates stay high for a long time and economic growth remains weak, shipping stocks will continue to be under pressure.

Second Variable: De-China-ification of Supply Chains

This is a double-edged sword. The U.S. and Western countries are accelerating the shift of industries from China to Mexico, India, and other countries. This will reduce freight volume exports from China, directly impacting Taiwanese stocks Evergreen and Yang Ming—since they mainly benefit from routes from Far East to the Americas. Conversely, companies like Maersk with a global layout can open new routes to offset losses.

Third Variable: Environmental Costs

Environmental policies such as IMO 2030 and 2050 zero-carbon emissions are becoming stricter. Large shipping companies can leverage economies of scale to upgrade their green fleets at relatively low costs and secure more orders. But small and medium-sized shipping stocks are tightly constrained by environmental costs.

How to Pick Shipping Stocks? The Investment Logic Is Clear

Buy the giants, avoid the flies

Leading companies with a market cap over USD 10 billion can spread costs through scale during industry downturns and have stronger risk resistance. Smaller companies are more likely to be knocked out during boom-and-bust cycles.

Look at route configurations

Be cautious of stocks overly dependent on Far East–Europe/Americas routes. Geopolitical conflicts and supply chain adjustments can directly hit these companies. Firms with diversified global routes have lower risk.

Fleet age and composition are crucial

New ships are more fuel-efficient and environmentally compliant, making upgrades easier and cheaper later. Old fleets will face huge environmental retrofit pressures around 2030.

Buy at cycle bottoms, avoid chasing highs

Shipping stocks are cyclical and closely follow macroeconomic trends. Smart investors buy in phases at the bottom of the cycle and gradually sell near the top. Is now the bottom? That depends on your own judgment.

Summary: The Investment Logic of Shipping Stocks

In essence, shipping stocks follow four words—follow the economy. When the economy is good and trade is active, they rise; when the economy is weak and orders decline, they fall.

If you are optimistic about a global economic recovery and falling interest rates, then large Taiwanese and U.S. shipping stocks are worth watching. But be sure to choose industry leaders, examine routes, and assess fleet composition—don’t be fooled by high volatility in smaller stocks.

Finally, be mentally prepared: shipping stocks may still experience volatility for a while. Don’t expect quick riches.