One of the largest shipping majors of the world has reported first-half profits far above what was reported over the past decade. This showcases how global supply chain disruptions have been powering profits for carriers.
Hapag-Lloyd’s cumulative profit for six months (up to June) jumped tenfolds over the previous year to €2.7 billion as freight rates rose due to evolving bottlenecks at busy ports, demand for goods, and a never-ending shortage of empty containers. This compares to a profit of about €977 million in the previous decade.
Rolf Habben Jansen, the chief executive said that he is not sure whether he will once again experience what was observed in 2021. The coronavirus pandemic has caused a massive ruction in shipping and supply chains owing to volatile demands following lockdowns and the booming e-commerce industry.
There is a shortage in supply and vessels are being tied up waiting to berth at already overwhelmed ports, resulting in sky-high shipping costs up from the previous year’s end.
With the first six months of the year, the average freight cost of Hapag-Lloyd per 20ft container had increased up to 46% amounting to $1,612.
It is the most recent container shipping major that has reported stellar first-half earnings. It also flagged an upbeat outlook on the supply chain disruptions, with the sector enduring a difficult decade of little profitability before the coronavirus pandemic struck. Danish rival Maersk raised the annual profit forecast last week. It has reported a bumper second-quarter result.