Shipping majors like Hyundai Merchant Marine, Yang Ming, and Hapag-Lloyd have released their Q1 earnings, reporting deficits in the quarter – as the maritime industry faces a steadily rising oil price and a spot market that had been weak for the initial few months of the year.
“We have had a solid start into the current year, but the market environment is challenging,” said Hapag-Lloyd CEO Rolf Habben Jansen in a statement after the earnings release. “Freight rates have been under pressure, bunker costs and trucking cost in some important markets were up, and we faced a weaker U.S.-Dollar, whereas higher transport volumes and synergies supported the result.”
Hapag-Lloyd posted a net loss of $40.5 million in Q1, which is significantly lesser than its Q1 ‘17 net loss of $68.8 million. The reduction could be attributed to the company merging with United Arab Shipping Company (UASC) last year which incidentally, might render direct year on year comparisons moot.
The much anticipated Maersk Line earnings report is coming out tomorrow, and the forecast has not been much different for the container line, with investment bank Jefferies expecting Maersk’s net profit to hover just above the breakeven point.