Hapag-Lloyd to beef up Asia-Europe presence with 23,500+ TEU ships

Germany’s largest liner shipping carrier Hapag-Lloyd will be boosting its presence on the Asia-Europe trade with massive, new containerships.

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Hapag-Lloyd revealed Wednesday that it signed an order with Korea-based Daewoo Shipbuilding & Marine Engineering for six, 23,500+ TEU containerships. The vessels are expected to be delivered between April and December of 2023.

“As part of Hapag-Lloyd sustainability strategy, the vessels will be fitted with a state-of-the-art high pressure dual fuel engine, which will be extremely fuel efficient,” Hapag-Lloyd said. “The engine will operate on LNG, but has alternatively sufficient tank capacity to operate on conventional fuel.”

As fellow members of THE Alliance with Hapag-Lloyd, HMM, ONE and Yang Ming will directly benefit from the purchase as well. Hapag-Lloyd vaguely hinted at an impending vessel purchase when issued its latest financial results in November by saying that, “In order to remain competitive in the medium term, the executive board of Hapag-Lloyd AG believes that the group will invest in new ship systems again in the not too distant future.”

Hapag-Lloyd reiterated at the time that it currently had no new orders for newbuilds and that it had a modern and efficient fleet thanks to its prior merger with UASC. As with many liner shipping companies, Hapag-Lloyd has been particularly profitable this year. Hapag-Lloyd posted a profit of $604.8 million for the first nine months of 2020, up from a profit of $333.3 million for the corresponding 2019 period.

Hapag-Lloyd even announced earlier this month that it was raising its full-year 2020 earnings forecast since it was previously updated in October “on the basis of a better-than-expected business performance in the current fourth quarter.”

“For the 2020 financial year, earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR 2.6 to 2.7 billion (previously: EUR 2.4 to 2.6 billion) and earnings before interest and taxes (EBIT) of EUR 1.25 to 1.35 billion (previously: EUR 1.1 to 1.3 billion) are now expected,” the company said.

BlueWater Reporting’s Carrier/Trade Route Deployment Report illustrates how Hapag-Lloyd currently stacks up on the Asia to North Europe and Asia to Mediterranean trades, as illustrated in the table below. Some of the vessel capacity operated on the Asia to North Europe trade is also factored into the Asia to Mediterranean figures as well, since many of the liner shipping services that operate between Asia and North Europe also operate between Asia and the Mediterranean.

Hapag-Lloyd currently has 108,993 TEUs of container vessel capacity that operates on the Asia to North Europe trade, putting it in nineth place on the trade, or second to last. Hapag-Lloyd also operates 211,206 TEUs of vessel capacity on the Asia to Mediterranean trade, putting it in in fifth place on the trade.

Source: Hailey Desormeaux, BlueWater Reporting