German liner takes hard hit in turbulent market
Hapag-Lloyd has concluded the first half of the year 2018 with a net loss of US$115 million, compounding the difficulties liners are facing in the present market.
The first half of 2018 has seen increasing fuel costs, higher charter rates and a slower than expected recovery of freight rates stem growth in the industry.
“In response to that,” said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd, “we have implemented additional measures to recover these costs: we are critically reviewing the economic viability of our ship systems and are further optimising our terminal contracts, to gain additional relief on the cost side.”
The reported average freight rate decreased to $1,020 per TEU in the first half of the year 2018 (compared to H1 2017: 1,065 USD/TEU).
On a pro forma basis and when compared to the combined business of Hapag-Lloyd and UASC in the first half year of 2017, volumes are up 3.9% and rates have increased 3.0%.
Bunker prices increased significantly to $385 per tonne in the first six months 2018 (H1 2017: USD 312/tonne) and mainly contributed to higher operational costs.
Rolf Habben Jansen, said: “For the remainder of the year, we see a slow but steadily improving market environment, but we recognise that there are still significant geopolitical uncertainties that could influence the market.
“This only reinforces the necessity to be able to react quickly when needed – and we therefore will accelerate some of our digitalisation initiatives and finalise our new strategy until the end of this year.”
The reported figures of the first half year 2018 include United Arab Shipping Company Ltd. (UASC) and can therefore only be compared to a limited extent.
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