Hapag-Lloyd observes shipping demand recovering
The German container shipping group Hapag-Lloyd is benefiting from a rebound in demand for transport, but its chief executive warned about the coronavirus' longer-term effects on economic activity.
"We see a recovery, which started probably some time in the course of third quarter, and we would expect that to continue going into 2021," chief executive Rolf Habben Jansen stated.
Nine-month earnings on Nov. 13 will be announced by the world's number five container line, having doubled its net profit in the first half of 2020 as it retained its full-year outlook.
The profitability of Hapag-Lloyd was boosted by cost reductions, lower fuel prices for shipping than a year ago and demand recovery, especially on Transpacific routes, Habben Jansen said.
In recent weeks, a number of banks have been raising their target price for Hapag-Lloyd, citing stronger freight pricing trends.
The share price of the company is not far below a seven-week high hit of EUR 53 on Wednesday, albeit sharply down from the all-time high of EUR 187 posted in May.
Rival Maersk, the number one container line in the world, proved to be resilient in the crisis as well.
In recent weeks, freight rates on Asia-Europe runs have risen and have been steady elsewhere. Broker estimates, however, show global transport volumes decreasing by about 11 percent annually in 2020, suggesting operators need to adjust market capacity to protect profits, he said.
Maritime Business World