Hapag Lloyd forecasts calm passage for shipping

FRANKFURT: Hapag-Lloyd is optimistic about the year ahead, despite global trade tensions, the German container shipping company’s chief executive said on Thursday after a first quarter earnings rise.
“Despite all the uncertainty, we see a somewhat stable development,” Rolf Habben Jansen said, adding that trade wars have so far had a limited effect on Hapag Lloyd’s business.
US President Donald Trump said on Wednesday that China had broken the terms of a trade deal, adding he would not back down on imposing new tariffs on Chinese goods.
Habben Jansen said that he still expects freight rates to increase significantly in the second quarter, after first-quarter prices were 5 per cent above the year-earlier period.
Hapag-Lloyd shares were up 1.1 per cent at 07:33 GMT, outperforming the market which was down 0.6 per cent.
Transport volumes would also rise, while after years of overcapacity the global fleet would increase by only 3-4 per cent this year with orders for new ships standing at a “healthy” 11 per cent of current capacity.
“Hapag-Lloyd is thus growing ahead of the market, with global volumes up 0.5 per cent in the first three months of 2019,” analysts from Fearnleys said in a note to clients.
An economic slowdown following the financial crisis forced some shipping companies out of business and led to mergers such as Hapag Lloyd’s 2017 link-up with UASC, which is owned by six Gulf states. This made it the fifth largest shipping operator. However, Habben Jansen said that he does not expect much consolidation in the next 12-24 months as the scope for additional scale effects was limited.
— Reuters