Container Boom Leads to Q4 Earnings Dip at Hapag-Lloyd
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HAMBURG, Germany — The sharp drop in freight prices following the pandemic has caused a slump in sales and profits at German container shipping company Hapag-Lloyd.
At the end of the year, the conflict in the Red Sea also had an impact on transport volumes, the company announced Jan. 30. The diversion has caused shipping firms to decide to sail around the Cape of Good Hope at the southern tip of Africa, greatly extending travel times.
According to preliminary calculations, the Hamburg-based shipping company achieved earnings before interest and taxes (EBIT) of the equivalent of 2.5 billion euros ($2.7 billion) last year. A year earlier, the figure was 17.5 billion euros.
Turnover slumped to 17.9 billion euros. In the record year of 2022, the shipping company had almost doubled its turnover and achieved the highest profit in its history.
At that time, the average price for freight was $2,863 per standard container, or 20-foot equivalent unit. In 2023, it fell to $1,500. This time, Hapag-Lloyd transported slightly more freight than in the previous year.
Hapag-Lloyd had already warned in November that conditions for container shipping would remain difficult. The industry’s capacity will exceed demand by 2024, making “active cost management” unavoidable.
Hapag-Lloyd ranks No. 13 on the Transport Topics Top 50 list of the largest global freight companies.
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