According to Hapag, the markets have normalized and should start to recover in the second half of the year

Hapag-Lloyd has reported a sharp decline in first-quarter results, in line with other players in the shipping industry, but the fifth-largest shipping company also cited indications that the sector may have bottomed out. The company reported a volume decline of almost 5% for the first quarter to just over 2.8 million 20-foot equivalent units (TEUs) compared to 2.9 million in the first quarter of 2022. Despite missing 2022’s records, Hapag remained profitable with a profit of around $2bn, thanks in part to the strength of its routes to South America and Latin America. CEO Rolf Habben Jansen said that new ships won’t mainly come onto the market until the second half of 2023 and that the inflow of new capacity will be partially offset by slow steaming and increased scrapping activity.

Habben Jansen predicted that fares would need to stabilize at least 25% to 30% above pre-pandemic levels as that is the magnitude of cost increases for airlines. He also noted there were signs of volume improvement and that the volume decline had started a year ago in the third quarter. The uncertainties that Hapag highlights are largely beyond its control. They pointed to ongoing inflationary pressures and geopolitical uncertainties, including the ongoing war in Ukraine, as factors that could negatively impact the forecasts. The company has already reached 44% of the upper end of its guidance ($1.9bn), in the first quarter EBIT). Annual profit (EBIT) is expected to be between $2.1bn and $4.3bn.

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