Hapag-Lloyd Cites Lower Bunker Costs for Reduced 2016 Transportation Costs

Tuesday February 28, 2017

Hapag-Lloyd AG (Hapag-Lloyd), in its report covering the company's 2016 Q4 and full year financial results, says lower bunker costs were a main driver behind the company's reduced transport costs, which declined by 12.3 percent in 2016, falling to €6.4 billion ($6.79 billion) from €7.3 billion ($7.75 billion) in 2015.

For the 2016 year, Hapag-Lloyd reports a lower average bunker consumption price of $210 per tonne.

The company says cost saving programs, including efforts toward improved fuel efficiency, also helped to drive down its transport costs.

Meanwhile, despite a 2.7 percent increase in transported volumes, lower average freight rates in 2016 of saw Hapag-Lloyd's revenue fall to €7.7 billion ($8.17 billion) from €8.8 billion ($9.34 million) the previous year.

The company's full year 2016 EBITDA results were €607 million ($644.42 million), down from €831 million ($882.23 million) in 2015.

Meanwhile, for 2016's Q4, Hapag Lloyd reports an increase in EBITDA to €226 million ($239.26 million) from €140.4 million ($148.63 million).

In July, Hapag-Lloyd and the United Arab Shipping Company S.A.G. (UASC) announced they had finalised a business combination agreement, facilitating the merger of the two companies.

In November, Adrian Tolson, Senior Partner at 20|20 Marine Energy, said continued consolidation within the container shipping markets was setting the tone for a tough 2017 in the bunker markets.