EMEA News
Lower Fuel Prices "Only Positive Support" for Hamburg Süd
As the growth of container shipping volumes slowed in 2013, container line Hamburg Süd reports that the "only positive support" for its business came from fuel costs, which declined from their highest 2012 levels.
Global capacity grew faster than demand over the year, putting additional pressure on freight rates in most trades.
Hamburg Süd and its Brazilian subsidiary Aliança increased transport volumes by just 1 percent to about 3.3 million twenty-foot equivalent units (TEU) year-over-year, while falling freight rates and devaluation of the U.S. dollar against the euro pushed shipping revenues down 3.9 percent to €5.3 billion ($7.3 billion).
The company's bulk and product tanker businesses were in the red for the year, while its liner services improved slightly over the previous year.
Hamburg Süd anticipates economic improvements in 2014 but says overcapacity will continue to weigh on the container line sector as government support for shipbuilding in South Korea and China, plus private equity funding, continues to support new ship orders.
The company said it is making investments to reduce its environmental impacts, including preparing for the use of low-sulfur fuels in coastal waters under new emissions rules and installing cold-ironing equipment on ships that operate on the U.S. West Coast to comply with local law.
Additional operational costs of $40 million per year created by these changes will require shipping surcharges.
Hamburg Süd and fellow German carrier Hapag-Lloyd called off plans for a merger last year that industry analysts had said would help Hamburg Süd keep up with bigger players in the industry.
