Comment / Red Sea alarm – overreaction, excuses and manipulation

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19/12/2023

While Red Sea and war risk talk abound among both experts and amateurs in container shipping – let me try to keep it very simple for you*.

(*Hoping the wave of abuse towards the carriers and their opportunism coming my way in the past 48 hours, suddenly stops.)

Rewind to 9 November, when the CEO of Hapag-Lloyd, Rolf Habben Jansen, possibly the most lucid and forthcoming with regard to the dire situation in which the box lines found themselves at the time, ...

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Hans-Henrik Nielsen
January 04, 2024 at 10:03 am
For “what would be considered a reasonable return of investment” = roundtrip voy freight contribution, please see my post on a “fun exercise” just prior xmas, 2023. That was obviously basis a Suez Transit, and before the COGH journey became required.

Whereas my little exercise is by no means 100 % correct (it will never be), allow its a pretty good ball park figure done over a glass of scotch. So unless you have approx USD 4000/feu in freight revenue for the roundtrip, why do it ? Better to put the investors money to work somewhere else… That is how i would look at it from a shareholder perspective.

Anthing above $4K/feu and it gets into “nice territory”, but by no means undue profiteering … for that we need to look at profit margins of say Apple ? Bear in mind that now there are extra cost for laid up vessels to cover 🙂 so, $6K/feu roundtrip Asia/Eur … sounds about a fair deal to me. Best way of evening this up : Enforce proper freight rates on EB shippers. Stop looking at main hauls/back hauls. The cost is the same (for the whole vessel).

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- Alessandro Pasetti
  January 04, 2024 at 10:48 am
  Hi, HH! I read your great back-of-envelope analysis, wasn’t sure about the c/p input but that was quite some insight in how things are playing out, I think –– thanks a lot for your comment!
  
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- Alessandro Pasetti
  January 04, 2024 at 10:49 am
  Re “undue profiteering”, you may have a different view then looking at the one piece I wrote on the topic y’day, rather than this one…
  
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