Hapag-Lloyd CEO Admits Cost Cuts
Hapag-Lloyd’s CEO has admitted the company will cut costs in order to stem its losses, according to Reuters.
Speaking to shareholders in Hamburg, Rolf Habben Jansen said: "Major cost positions have risen more than initially expected and are pressuring operating margins.
“We are responding short-term to this development through forceful cost management and will keep Hapag-Lloyd competitive this way.”
To ease the pressure, Hapag-Lloyd will accept cargo that is more valuable, reduce terminal contract costs and adopting more efficient ship systems.
Jorn Springer, Hapag-Lloyd's, Senior Director at Hapag-Lloyd, talks about what challenges the shipping industry is facing in a Port Technbology technical paper
After downgrading its profit forecast last week, Hapag-Lloyd lost almost $1.4 billion of its market value despite reducing its losses from 2017.
The container shipping industry is fearful of the consequences that oversupply, rising freight rates, fuel costs, and an emerging trade war between the US and China could have on the market.
Many of its major players such as Maersk, Hapag-Lloyd and CMA CGM either acquired or merged with smaller rivals in 2017 in order to reach a profit in 2018.
The latest carriers to combine are Chinese company COSCO and Hong Kong’s Orient Overseas International (OOIL), which received the final approval they needed from the US yesterday.
On Monday, Hapag-Lloyd denied rumours that it was in merger talks with French rival CMA CGM, a deal which, if it went through, would create the biggest container company in the world.