The addition of new environmentally friendly vessels has helped German container shipping major Hapag-Lloyd counteract the prolonged capacity bottleneck caused by geopolitical tensions.
Vital shipping lane
To avoid the Red Sea – a vital shipping lane linking Europe and Asia that has been hit with multiple attacks against commercial vessels over the past few months, numerous shipping companies have been diverting their ships around the Cape of Good Hope, leading to a shortage of vessel capacity on some routes, higher spot freight rates and rising transport costs.
(ULCV) in 2024
However, bringing new container ships into play seems to have helped Hapag-Lloyd mitigate the negative effects of the disruptions.
It is noteworthy that Hapag-Lloyd welcomed several new LNG-powered dual-fuel ultra-large container vessels (ULCV) in 2024, which are said to be the largest box-ships to ever sail under the German flag.
Climate-neural manner
The new buildings feature advanced LNG dual-fuel engines and energy-efficient designs.
hey represent a significant contribution to Hapag-Lloyd’s efforts to operate its entire fleet in a climate-neural manner by 2045.
Fifth container shipping
The company – which is the world’s fifth container shipping carrier according to Alphaliner’s TOP 100 list — concluded the first half of the 2024 financial year with an EBITDA of $2 billion, compared to $3.7 billion recorded in the same period last year. The group EBIT decreased to $0.9 billion from $2.8 billion and the group profit to $0.8 billion from $3.1 billion.
Market conditions
Because of the significantly changed market conditions following the end of the COVID-19 pandemic, these results are well below the previous year’s level, but they are also above the initial expectations due to higher demand and rising spot rates in the second quarter of 2024, the company stated
Better spot rates
“Even though we were unable to match the exceptionally good results of the prior year, we delivered a very good first half of 2024 thanks to strong demand and better spot rates,” Rolf Habben Jansen, CEO of Hapag-Lloyd, commented.
Additional capacity requirements
“We have added several new ships and containers to our fleet. This has helped us to meet the additional capacity requirements resulting from the security situation in the Red Sea and the rerouting of ships around the Cape of Good Hope, thereby keeping supply chains intact.
Decarbonise our fleet
At the same time, we have made more progress in our efforts to decarbonise our fleet as well as in building up our terminal business under the Hanseatic Global Terminals brand. In the second half of the year, we will increasingly focus on continued growth and the high quality of our services,” Hapag-Lloyd CEO added.
Given the fact that demand and freight rates have recently exceeded expectations, the company’s Executive Board raised its forecast for the current financial year.
Geopolitical challenges
The group EBITDA is expected to be in the range of $3.5 to 4.6 billion and the group EBIT to be in the range of $1.3 to 2.4 billion.
In view of the highly volatile development of freight rates and major geopolitical challenges, this forecast remains subject to a high degree of uncertainty, the carrier said.
