Hapag-Lloyd Expects Continued Strength In Shipping Volumes Despite Profit Drop

Hapag-Lloyd, led by CEO Habben Jansen, anticipates strong container shipping demand driven by global trade, serving as an economic health indicator. For the first nine months of 2024, Hapag-Lloyd’s TEU volume grew by 5%, reaching 9.3 million metric tons.

Shipping Volumes and Financial Performance

• Container Volume:
  • The volume of containers moved by Hapag-Lloyd’s fleet of 292 ships rose to 9.3 million TEUs (twenty-foot equivalent units) in the first nine months of 2024, marking a 5% increase compared to 8.9 million TEUs in the same period last year.
  • Global container volumes have risen by 6.3% year-to-date, the highest growth rate since 2021.
• Freight Rates:
  • Hapag-Lloyd achieved an average freight rate of $1,467 per TEU, a 9% decrease compared to the previous year.
• Net Profit:
  • Despite increased shipping volumes, Hapag-Lloyd’s net profit fell by 47% due to rising operational costs and the impact of disruptions like the Suez Canal crisis.
  • The company cited costs incurred from detouring ships around Africa to avoid attacks by Houthi militants, which significantly affected profitability.

Suez Canal Crisis

• Ongoing Disruptions:
  • Hapag-Lloyd’s CEO, Habben Jansen, stated that there is no end in sight for the disruptions around the Suez Canal. These ongoing issues have been a major factor in increased operational costs for commercial shipping.

Full-Year Outlook

• Earnings Forecast:
  • Hapag-Lloyd’s full-year earnings are expected to be near the levels seen in 2023, despite a positive rise in shipping volumes.
  • Last month, the company raised its earnings forecast, signalling optimism despite the challenges.

Impact of U.S. Election on Freight Industry

• Macroeconomic Implications:
  • Habben Jansen also touched on the potential impact of Donald Trump’s presidential campaign and his focus on import tariffs. While such policies could provide positive macroeconomic impulses, they may also lead to damaging effects on trade and shipping costs.

Hapag-Lloyd’s results underscore the complex landscape of the container shipping industry, where rising global demand for goods transport contrasts with geopolitical challenges and operational costs.