Photo: Hapag-Lloyd.

Despite seeing first-quarter carryings increase 6.8% to 3m teu, German carrier Hapag-Lloyd saw revenues and earnings decrease year-on-year due to lower average freight rates, which declined from $1,999 per teu in the first quarter of 2023 to $1,359.

As a result, revenues fell 24% to $4.26bn while Ebit was slashed by 83.5% to €365m, compared to the first quarter Ebit of €1.47bn in 2023.

Its recently formed Terminals & Infrastructure unit recorded revenues of €98m and an Ebit of €16m.

“Even though our results are significantly below the exceptionally strong figures from the previous year, owing to the normalisation of supply chains, we are pleased to have got the new year off to a good start,” chief executive Rolf Habben Jansen said.

Mr Habben Jansen said the year had started according to the “normal seasonal patterns”, beginning relatively sluggishly before a pre-Chinese New Year rush, but he seemed to be somewhat mystified by the recent strong demand and accompanying surge in pricing.

“We’ve seen recently a very steep increase in spot rates. It’s a little bit difficult to understand where that spike comes from,” he said.

“We do see very strong demand over the last number of weeks, but the background of that is a bit unclear. Is that a short-term spike, or it really something to do with an early peak season, or some restocking activities here or there?”

The recent strengthening of trade has however, forced the box line to adjust its full-year guidance, and it has now forecast an Ebit of between breakeven and €1bn for 2024, compared to previously forecasting a range between a €1bn loss and €1bn profit.

“We consciously raised the guidance but also still kept a very broad range, “ Mr Habben Jansen told analysts during the accompanying earnings call.

“Because when we look at the second half of the year, I think there is a lot of uncertainty – we can see from the swings that we see from, for example, the fourth quarter to the first quarter, those swings can be quite significant,” he added.

However, one aspect that has been largely settled is its long-term contracts, which have now mostly been concluded on the transpacific, Asia-Europe and Latin America trades at “levels that are similar or slightly higher than what we saw last year”.

“Our approach in the contracting season has been to try and secure a little bit more than we had the previous year.

“I think in general we’ve signed up a little bit more. And I think we’re happy with that. Particularly on the BCO side, I think we’ve seen fairly healthy growth.”

As with other liner executives waiting to see how the Red Sea situation progresses, Mr Habben Jansen stressed that carriers still had a few cards up their sleeve to deal with the industry’s overcapacity when it returns.

“The inactive fleet has been exceptionally low for the last four years and when we look at the global order book, those ships are coming in – but let’s also not forget that scrapping at the moment is still at historically low levels and scrapping will have to come up even significantly beyond the 500,000 teu that is now predicted for next year, because simply in the long run you have to assume that about 4% of the global fleet is going to be scrapped every year as most of the ships are being used up to 25 years and especially with tightening environmental regulations.

“In the second half of this decade we should see scrapping of probably closer to 1m teu a year as from maybe 2026 or 2027 – that will also help to rebalance the market at some point,” he said.

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