Hapag Lloyd CEO claims container shipping freight rates are too low

According to the chief executive of Germany's Hapag Lloyd, Rolf Habben Jansen, global container shipping freight rates have reached unsustainable levels and must rebound. Habben Jansen stated: "There are spot rates that are clearly below cost. In the long run, that typically does not hold. Whenever everything becomes cash negative, then people take the measures that need to be taken to settle rates slightly above cost."

The Shanghai containerised freight index bottomed out early in the second quarter after slipping to below $1,000 per twenty-foot equivalent unit (TEU), but is barely moving. Transport expenses, meanwhile, have increased significantly. Habben Jansen cited a mix of inflation and hikes in fuel and labor costs, among other factors. The company's transport expenses rose 3% year-on-year in the first quarter of 2023 to $1,324/TEU.

Habben Jansen said he expected them to settle at $1,250-1,750/TEU in due course, but this would still be 25% above pre-pandemic levels. The company in May upheld its 2023 full-year guidance with earnings before interest and taxes (EBIT) seen in a 2-4 billion euros range.

Source: reuters.com

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