Chief executive says Hapag-Lloyd is “critically reviewing the economic viability of our ship systems.”
Germany’s Hapag-Lloyd reported a loss for the first half of 2018, underlining the continuing challenges facing the liner industry.
The fifth largest containership owner in the world by tonnage, Hapag-Lloyd said the period ending 30 June was “shaped by clearly increasing fuel costs, higher charter rates, and a slower than expected recovery in freight rates.”
Chief executive Rolf Habben Jansen remained optimistic for a slowly improving market, but the threat of multiple trade wars “could influence the market.”
Total volume on Hapag-Lloyd’s ship network rose 39% to 5.8 million-twenty foot equivalent unit (teu). But the average freight rate for the first half slipped 4% to $1,020 per teu.
Revenue rose 34% to $6.5 billion, but expenses rose slightly faster at 36% to $5.4 billion. Ship fuel prices were up over 23% for the period amid the general rise in oil prices.
The bottom-line loss for the period was $122 million versus a $45 million loss in the year earlier period.
Hapag-Lloyd’s results come hard on the heels of an earlier warning from Maersk that its full-year operating profit would come in at $500 million to $800 million less than expected.
In that instance, the world’s largest shipping company also blamed uncertainties impacting container freight rates, fuel prices and geopolitical risks in making the warning.
But rates may be seeing some improvement in the third quarter. This, after major liner operator instituted some service cuts.
The Ocean Alliance, which is comprised of China’s Cosco, CMA-CGM and Evergreen, ended one weekly sailing on its trans-Pacific route. Overseas Orient Container Lines, which is now part of Cosco, also put a smaller ship on one of its trans-Pacific lines.
The result has been stronger rate on the trans-Pacific trade lane. The FreightOS Baltic Index for China-to-North America has gained 46% to $1,900 per teu.