Hapag-Lloyd, a key player in global container liner shipping, has updated its financial outlook for 2024, projecting an increase in its earnings before interest, taxes, depreciation, and amortisation (EBITDA) to a range of $4.6 billion to $5 billion. This adjustment, up from the prior estimate of $3.5 billion to $4.6 billion, is attributed to a surge in demand and elevated freight rates. The revision comes despite the logistical challenges and increased costs associated with rerouting vessels around the Cape of Good Hope, a necessity due to security concerns in the Red Sea sparked by attacks from Houthi militants.
The company has cautioned that this forecast remains tentative, given the unpredictable nature of freight rates and the current geopolitical landscape. The redirection of shipping routes, away from the Suez Canal towards the longer African circumnavigation, has necessitated additional capacity to maintain service levels amidst high demand. "The transport times are much longer, which is why we needed significantly more capacity and bought capacity. Despite this, demand was relatively high and capacity was scarce or is still scarce," explained a Hapag-Lloyd spokesperson. This scarcity has led to a rise in rates, particularly noticeable on the Far East to Europe corridor. Furthermore, Hapag-Lloyd disclosed preliminary EBITDA figures for the first nine months amounting to approximately $3.6 billion, a decrease from the previous year's $4.5 billion.
Source: Reuters