EMEA News
Hapag-Lloyd Net Loss Up on Higher Bunker Bills
Container line Hapag-Lloyd AG (Hapag-Lloyd) says in its annual report that its net loss was up in 2012 as fuel prices rose faster than freight rates.
The company lost €128 million ($166 million) on revenues of €6.8 billion ($8.8 billion), compared with €29 million ($37.5 million) loss and €6.1 billion ($7.9 billion) in revenues in 2011.
"The liner shipping industry faced significant challenges once again in 2012," CEO Michael Behrendt said in the company's annual report.
"The bunker price reached record highs and the year was once again dominated by intense competition, especially on Asia–Europe routes."
Behrendt said the company was able to increase rates "on several occasions," but that transport volume fell below forecasts in the second half of the year, making it hard to maintain higher prices.
"During the peak season, it is usually possible to charge high mark-ups due to the large cargo volume, which make an important contribution towards overall earnings in our line of business," he said.
"Last year, there was no market appetite for these premium peak-season prices given the global economic downturn and the recession in parts of Southern Europe."
However, Behrendt added that the company was able to raise average rates on transpacific, particularly Latin America, trades.
The company spent 9 percent more on fuel than in 2011 as the average bunker price rose from $605 to $660 per metric tonne (pmt).
Berhrendt said Hapag-Lloyd keeps its costs down by operating an efficient, modern fleet, and in 2012 the first three of ten new 13,200 twenty foot equivalent (TEU) container mega-ships went into service.
He also noted that the company, which is based in Germany, began working with five Asian shipping companies in March 2012 through the G6 Alliance, and he said it is working toward further cooperation within the industry.
"Hapag-Lloyd would also like to play an active role in the consolidation of the liner shipping sector and is currently engaged in talks concerning this matter," he said.
Hapag-Lloyd and Hamburg Südamerikanische Dampfschifffahrts-GesellschaftKG said in December that they were in talks over a possible merger.
