Hapag-Lloyd has unveiled how it is weathering the Covid-19 storm
Hapag Lloyd chief executive Rolf Habben Jansen unveiled three priorities for the shipping line to mitigate the impact of Covid-19 in a recent virtual press briefing.
He explained that Hapag-Lloyd is “well positioned and we have clear priorities to mitigate negative effects on our people, customers and business”.
Mr Habben Jansen said safety of its employees is the shipping line’s number one priority and protective measures are and will remain in place. Most staff are working from home to minimise the risk of transmitting the virus and there has been significant investment in IT infrastructure to accommodate this.
Its customer priority is seeing the company adjusting capacity to demand. “We on-hired equipment in Asia and Europe to secure sufficient availability of boxes to safeguard an uninterrupted supply chain,” said Mr Habben Jansen. The company has also started its Digital Capability to assist customers.
Hapag-Lloyd’s third priority is its financials. The carrier is re-evaluating its investment plans and secured additional liquidity in case needed. The company has a healthy cash balance and solid balance sheet. Mr Habben Jansen said “We are well positioned to weather the storm.”
In terms of impact on plans such as ordering new tonnage, he said “It is not a secret that we are looking at ordering new ships but it is also not logical to put an order out there now… we will wait until things settle down.”
In terms of chartered ships, he said Hapag Lloyd had returned only a few, in the small double digit numbers.
Speaking generally about how the container shipping industry will weather the Covid-19 impact, he said there were “important differences” to 2008 and 2009, when the container shipping industry entered into “quite a long and difficult period”. He said the industry had an orderbook that was half of the global fleet and this resulted in a “massive imbalance between supply and demand.”
He said “Today that situation is different as the orderbook is a record low and we expect the orderbook to come down even further.”
He added “We need to adjust capacity to lower demand, there are quite a lot of sailings being taken out… when the market picks up capacity will come back. Most ships are available and it will be possible to put them back in service quite soon.”
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