Kuala lumpur: Westports Holdings Bhd is anticipating a rise in container volumes for the second quarter of 2025, as reported by CGS International Securities Malaysia Sdn Bhd (CGS MY). This increase is attributed to the commencement of the Gemini Cooperation shipping alliance, which began operations on February 1, 2025.
According to BERNAMA News Agency, the introduction of the Gemini alliance has led to a significant boost in Westports’ trans-shipment (t/s) volumes during the initial months of 2025. The reshuffling of containers by Hapag-Lloyd as it joined Gemini has contributed to a sustained increase in Westports’ t/s volumes. Moreover, Evergreen’s decision to redirect two of its container shipping services from the Port of Tanjung Pelepas (PTP) to Westports as of April 1, 2025, has further enhanced t/s volumes at Westports. This move was seen as a result of Gemini’s transition to a hub-and-spoke model, which led Maersk and Hapag-Lloyd to allocate more volumes to PTP.
The US-China trade war, which commenced on April 2, 2025, and was temporarily suspended for 90 days starting May 14, 2025, has also played a role in boosting Westports’ volumes. The initial collapse in trade between the US and China resulted in shipping lines rerouting their vessels to alternate trades, with shipping capacity between the two countries being reinstated after mid-May due to renewed US import demand. This realignment of vessel deployments led to increased trans-shipment activities at both Port Klang and Singapore.
CGS MY forecasts a modest recovery of 3.4 percent year-on-year to 11.19 million t/s in 2026, with a further acceleration to 5.5 percent y-o-y to 11.80 million t/s in 2027. This growth is expected as manufacturers shift production from China to Southeast Asia in response to the US trade war, benefiting Malaysia’s containerised volumes.
The average revenue per TEU (ARPT) is projected to grow year-on-year, with stronger container volumes in the second quarter of 2025 potentially acting as catalysts for a share price re-rating for Westports. Additionally, the 15 percent increase in port charges, effective from July 15, 2025, is anticipated to positively impact Westports’ third-quarter results.
However, CGS MY warns of potential downside risks, including the possibility of the US reinstating punitive trade tariffs on global economies (excluding China) after the 90-day suspension ends on July 8, 2025, and a potential global recession that could affect container trade routes.