Hapag-Lloyd: It Should Be Possible to Make Money in Box Markets

20,000 TEU ship orders could be on the horizon, said Janssen

Hapag-Lloyd CEO Habben Janssen says box shippers operate in an environment in which it should be possible to turn a profit, ShippingWatch reports.

"It always surprises me, that there are so many companies struggling with an industry that grows 3-4 percent every year," said Janssen.

"With an industry in growth it should be possible to make money."

Over capacity has been blamed for holding down rates within the industry.

Last week, container shipping rates were said to have fallen sharply over the last eight weeks, with Shanghai-Rotterdam prices halved over the period.

But membership of the G6 alliance is key for Hapag-Lloyd, said Janssen, adding that G6 has the best coverage across all trades compared to other alliances such as 2M and Ocean Three.

He revealed that G6 is currently looking to make a 5 year plan about which companies will invest in which ships, with Hapag-Lloyd having received board approval to order five new ships.

"We are looking at the services between Europe and Latin America," said Janssen.

Liquidity is Very Important for Container Shipowners

"When the Panama Canal opens with its new lock, ships with up to 12,000 TEU [twenty-foot equivalent unit] will be able to pass.

"This is the size of vessels we are talking about."

But he also said orders for larger ships with up to 20,000 TEU capacity could be on the horizon as a result of the five year plan being formulated.

"Most likely, we will invest in a number of ultra large vessels.

"How many and exactly when, is what is currently being discussed."

Janssen added that Hapag-Lloyd has improved its liquidity position and has a 10-year commitment from its major shareholders, which will prove key to being able to invest in the future.

"This is very important for container shipowners, if you plan on investing in the future."

Last month, consultants Alix Partners said lower bunker costs will not be enough to fund required investment for box carriers.