relaxation in the second half of the year
Hapag-Lloyd sees an end to the supply chain chaos
Container giant Hapag-Lloyd is benefiting from delivery bottlenecks in global shipping. After an increase in profits at the beginning of the year, the head of the shipping company Habben Jansen expects a slight relaxation in the second half of the year, when the situation in Chinese cities like Shanghai calms down.
After a sharp rise in profits earlier this year, container shipping company Hapag-Lloyd expects port bottlenecks to ease in the second half of the year. Global supply chains are still under significant pressure, including due to the latest measures to combat the pandemic in China, said shipping company chief Rolf Habben Jansen. An improvement in this situation is foreseeable in the second half of the year.
He reiterated the recently updated earnings forecast, but added that the outlook is subject to significant uncertainty due to the war in Ukraine.
Limited shipping traffic is the leading cause of delivery problems and price hikes around the world. Seven of the ten largest container ports in the world are located on the Chinese coast, including the major financial metropolis of Shanghai, which has been under severe lockdown for six weeks due to the current zero Covid policy in China. If individual terminals are closed due to a corona epidemic, shipping traffic stops.
“Can’t be fixed quickly”
According to estimates by Allianz maritime experts, even if the blockade is successful, it will still take several weeks for the mega traffic jam off Shanghai to be resolved. “This cannot be solved quickly,” said Justus Heinrich, head of ship hulls worldwide at the Allianz AGCS subsidiary. It will take at least one or three months to get the situation under control.
According to him, shipping is already experiencing unprecedented port congestion due to the pandemic, which is putting port crews and personnel under great pressure. After the collapse of the global economy in the first year of the Crown, they have to meet the increase in demand.
For this reason, Hapag-Lloyd – according to data from the sector service Alphaliner, the fifth largest container line in the world – had already significantly raised its forecasts at the end of April in view of the sharp increase in freight rates. Freight rates, from which the profit is fueled, increased by more than 80% to $ 2774 per standard container (TEU) at the beginning of the year due to low capacity and high demand at the same time. Operating profit (EBIT) tripled in the first three months to 4.3 (previous year 1.3) billion euros.