Hapag-Lloyd had a net profit of $54 million in 2018, compared to $36 million in 2017. Revenue was $13.6 million in 2018 compared to $11.3 million on 2017.
The company also is rolling out improvements in procurement, focusing on transport services, on which it spends $1 billion per year, on a worldwide basis following a successful pilot in Asia and Europe.
“This is not only about trying to get lower rates, but also trying to get the right modal split and trying to optimize the way we organize the transport,” said Habben Jansen.
The Hamburg, Germany-headquartered carrier also is prioritizing initiatives to reduce empty container moves on which it also spends about $1 billion annually.
Quality initiatives include an effort to increase digital booking of cargo on Hapag-Lloyd’s web channel, currently at 7 percent, and developing new digital services.
Hapag-Lloyd is the fifth-largest container carrier after Maersk, MSC, COSCO and CMA CGM. While Habben Jansen said the company does not have aggressive expansion plans, it is adding new services and attempting to be more agile in starting or discontinuing services.
Examples of new services are its East Africa Service 2 and Dakar Express service in West Africa added in 2018 and a new Caribbean Express Service between the Netherlands, U.K. and Netherlands Antilles, Costa Rica and Colombia that started in January.
Habben Jansen said Hapag-Lloyd foresees fairly stable container demand growth in 2019, despite some recent reduced trade projections and geopolitical risks.
He said industry forecasters IHS and Drewry are expecting container volumes to grow 4.7 percent and 4.1 percent, but other analysts are projecting slower growth.
Hapag-Lloyd expects both the volume of cargo it carries and freight rates to increase slightly this year.
Bunker rates are expected to increase moderately and Habben Jansen said there has been good acceptance of its new bunker fuel formula by customers in advance of the IMO low-sulfur regulation that will go into effect next year.
Hapag-Lloyd is projecting earnings before interest and tax of about 500 million euros to 900 million euros this year (with 10 million to 50 million euros added by an accounting rule change called IFRS 16) compared to 520 million euros in 2018.
Habben Jansen said the supply-demand balance in the container shipping industry should improve this year, citing projections that the aggregate capacity of new containerships delivered in the next two years is expected to continue to be modest and similar to the level in 2018 (1.2 million in 2018, 1 million TEU in 2019 and 1.2 million in 2020). Scrapping is expected to climb from 0.5 percent of the world container fleet in 2018 to 2.1 percent in 2019 and 2.1 percent in 2020.