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Hapag-Lloyd outlines selective growth in Strategy 2023

“Delivering value to get the most attractive cargo on board is at the heart” of the plan, says CEO Rolf Habben Jansen.

   Hapag-Lloyd has released details of its Strategy 2023, which it says promises to deliver value and drive home company differentiators.
   Following a period of consolidation, the liner shipping industry has changed significantly, according to Hapag-Lloyd, which said it is more than two times larger than it was in 2014 in terms of transport capacity. 
   At the same time, further consolidation among the largest players in the industry is less attractive due to decreasing incremental scale benefits, the company said, pointing out that as a result, the industry has come to a turning point. Hapag-Lloyd will therefore focus on significantly improving quality for its customers, selective global growth and becoming profitable throughout the cycle, it said.
   “Size is not the name of the game anymore but customer orientation. It is obvious that customers expect more reliable supply chains, so our industry needs to change and invest more. At the same time, we know that people are prepared to pay for value,” said Hapag-Lloyd CEO Rolf Habben Jansen. 
   “Going forward, delivering value to get the most attractive cargo on board is at the heart of our new Strategy 2023. To be number one for quality is the ultimate promise to our customers and a strong differentiator from our competitors,” he said.
   Hapag-Lloyd said Strategy 2023 is based on key cost initiatives focused on network optimization, terminal partnering and further improvements in procurement and container steering. In addition, optimized revenue management will be designed to ensure that the most attractive cargo gets on board. 
   “At the core of the new strategy is an enhanced differentiation by offering unrivaled levels of reliability and service quality,” the company announcement said. “Hapag-Lloyd is making changes to its structures, systems, processes and operations and focusing single-mindedly on delivering customers a better and more efficient experience in their supply chains. 
   “At the same time, additional improvements aim to turn Hapag-Lloyd into a more agile, dynamic and analytically driven organization. More investments in digitalization and automation will be made to further exploit digital excellence. One example is to increase the share of the online business via the web channel to 15 percent of Hapag-Lloyd’s overall volume by 2023,” the announcement said.
   Hapag-Lloyd said financial targets by 2023 will focus on generating economic value by delivering a return on invested capital that is higher than the weighted average cost of capital. “This implies an EBITDA margin of approximately 12 percent,” the company said.
   A cost management program with a savings run-rate target of $350 million to $400 million also has been launched, Hapag-Lloyd said, to ensure a competitive cost position is maintained after deploying the strategy initiatives. 

Kim Link Wills

Senior Editor Kim Link-Wills has written about everything from agriculture as a reporter for Illinois Agri-News to zoology as editor of the Georgia Tech Alumni Magazine. Her work has garnered awards from the Council for the Advancement and Support of Education, the Georgia Institute of Technology and the Magazine Association of the Southeast. Prior to serving as managing editor of American Shipper, Kim spent more than four years with XPO Logistics.