Shipping group earns more in six months than in previous 10 years

Hapag-Lloyd’s bumper profits come amid Covid-19 disruption to global supply chains

The pandemic has caused large ructions in supply chains and shipping due to volatile demand as a result of lockdowns and booming ecommerce. Photograph: iStock

The pandemic has caused large ructions in supply chains and shipping due to volatile demand as a result of lockdowns and booming ecommerce. Photograph: iStock

 

One of the world’s largest shipping companies has reported first-half profits far in excess of those made over the past decade as a whole, illuminating how disruption to global supply chains is powering bumper profits for carriers.

Hapag-Lloyd’s net profit for the six months to June jumped tenfold over the previous year to €2.7 billion as freight rates surged due to rampant demand for goods, bottlenecks at ports and a shortage of empty containers. That compares to a total net profit of €977 million in the previous 10 years.

“What we’ve seen in 2021, I don’t know if we’ll ever see that again,” chief executive Rolf Habben Jansen said.

The pandemic has caused large ructions in supply chains and shipping due to volatile demand as a result of lockdowns and booming ecommerce. Containers have been in short supply and vessels have been tied up waiting to berth at overwhelmed ports, leading shipping costs to rocket since the end of last year.

Hapag-Lloyd’s average freight cost per 20ft container rose 46 per cent to $1,612 (€1,373) in the first six months of the year.

Upbeat outlook

It is the latest major container shipping group to report bumper first-half earnings and flag an upbeat outlook on the back of supply chain disruptions, with the sector having endured a difficult decade of minimal profitability before the pandemic struck. Danish rival Maersk raised its annual profit forecast last week as it reported a stellar set of second-quarter results.

– Copyright The Financial Times Limited 2021