Hapag-Lloyd sailing in quiet waters during covid-19
The contrast could hardly be any greater. While aviation is fighting for survival, shipping is doing quite well. At the beginning of the corona crisis, container liners, too, feared dire consequences, estimating a double-digit volume decline.
“If 20% of our volume is suddenly gone, then we are missing $200 million of revenue a month. In order to react quickly to that, we had to take costs out of the system,” Hapag-Lloyd CEO, Rolf Habben Jansen exclaimed during an online conference in Hamburg last Thursday, referring to a stiff austerity program as reaction to the sudden volume slump caused by the corona pandemic. And the manager had more to say.
Hapag Lloyd sees higher Transpacific volumes than in 2019
“At the outbreak of corona, nobody expected that demand would rise again that quickly,” Mr. Habben Jansen confessed. This volume increase is best evidenced by the upward trend of container transports on transpacific trade lanes that have meanwhile surpassed 2019 figures. “Since August onwards, we’ve been well ahead of the capacity that was deployed a year ago. On the supply side, the situation is pretty healthy, too,” Mr. Habben Jansen stated.
One reason could be that consumers spent less money on restaurants, concerts, movies, and entertainment in general, but invested in household items such as furniture or electronic goods and consumables, since many people were spending more time at home. As a reaction to revitalized trade, “we decided, in August, to deploy larger ships and operate additional vessels on key trade lanes compared to the same period a year ago,” he explained.
Hapag Lloyd prospecting 5.7% growth in 2021
This said, the Dutch national turned to the future that, according to international specialized consulting firms, looks quite bright for the shipping industry in general, which can expect a global volume growth averaging 5.7 % in 2021.
Next to the market development, Hapag-Lloyd’s performance during the pandemic was an important topic, tabled by the manager during the virtual meeting.
He pointed out that despite the savings program and most employees working from home to prevent infection and stay safe, Hapag-Lloyd’s transport quality has not suffered, and some services could even be improved.
“Customers can access our system via the Hapag-Lloyd Navigator and find out how we are performing not only in general regarding the quality promises we have made, but also specifically for them.” This customized service enables a dialogue on what can still be done to improve the performance even further.
Hapag Lloyd pushing zero emission to zero by 2050
On the team side, the biggest concern was and continues to be the change of crews, as Covid-19 is still spreading worldwide. Given these rather detrimental circumstances, the exchange of board personnel remains being a challenging issue.
Touching on global warming and environmental issues, Habben Jansen said that Hapag-Lloyd’s aim is to become climate neutral in 30 years from now, pushing emissions down to zero by 2050 at the latest.
He pointed out that Hapag-Lloyd ‘s 15,000 TEU vessel, ‘Sajir’, is currently being converted to operate on Liquified Natural Gas, thus reducing greenhouse gas emissions by 20% and sulfur dioxide and particles by even more than 90% compared to crude oil or ships propelled by diesel engines.
The Sajir project is a pilot; the first of its kind worldwide. However, the conversion is a fairly costly exercise requiring investments of US$35 million. It is an amount “we will not earn back in the lifetime of this vessel,” he resumed. This indicates that for cost reasons, the Sajir conversion remains unique and none of the other 250 ships belonging to the Hapag-Lloyd fleet will be retrofitted from traditional fuel burn to Liquified Natural Gas.
Final remarks from CEO Rolf Habben Jansen: “We’ll step up our efforts in reducing our environmental footprint. Our aim is to be a bit ahead of the environmental targets demanded by the regulator.”