Hapag-Lloyd expects supply chains to normalize

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Hapag-Lloyd freighter in the port of Hamburg: sales doubled during the crisis

Photo: Markus Tischler / IMAGO

Germany's largest container shipping company Hapag-Lloyd is assuming that the supply chains will relax - and that freight prices will therefore fall in the coming months.

"We are currently seeing the first signs in some trades that short-term rates are softening in the market," said CEO Rolf Habben Jansen when the half-year report was presented in Hamburg.

Nevertheless, he expects a strong second half of the year.

The shipping company was already earning well in the first six months.

Habben Jansen expects the tense situation in global supply chains to improve.

Industry, craftsmen and consumers have been complaining since the corona crisis that urgently needed raw materials and preliminary products are missing or are being delivered with delays: chips for car on-board computers were missing, as were bicycles, insulating materials for construction sites or wood for furniture.

According to experts, the shortage slowed down the economy – and could also change private consumer behavior in the long term.

Economic downturn dampens demand for containers

Will that happen now?

At least in the months of January to June, Hapag-Lloyd still took in significantly more than a year earlier, despite a practically stagnant transport volume.

The bottlenecks in the ports lead to above-average turnaround times for ships and containers - and as a result, high transport prices.

Habben Jansen predicts that the situation in the global supply chains should ease after the high season in autumn, which is important for the shipping industry and in which the large trading companies fill their warehouses for the Christmas business.

But that's no reason to be happy: "You can see worldwide that the economic development is not so exciting," he said.

For his business, however, this also means the hope of returning to a certain normality.

Sales almost doubled to almost 17 billion euros.

"We have benefited from significantly better freight rates and can look back on an exceptionally strong course of business in the first half of the year," said Habben Jansen.

»At the same time, a strong increase in all cost categories increases the pressure on our unit costs.«

The high income was offset by higher costs for handling containers, for charter ships and an increase in the average price for bunker consumption.

The bottom line is that the shipping company still made a profit of around 8.6 billion euros, three times as much as a year earlier.

Hapag-Lloyd had already presented preliminary figures at the end of July and at the same time raised the forecast for 2022.

Earnings before interest and taxes are expected to reach EUR 16.3 to 18.3 billion this year.

That would be significantly more than the 9.4 billion from 2021.

Apr/dpa/Reuters