German container shipping major Hapag-Lloyd intends to navigate through the coronavirus crisis without seeking state aid.
Unlike many other large companies in Germany that have required financial support from the government in order to cope with COVID-19, Hapag-Lloyd sees no need for such a move.
“We will not look for government support as we are pretty confident that we will manage to get through this crisis on our own,” a spokesperson of Hapag-Lloyd told Offshore Energy – Green Marine.
As OE already reported, the shipping company has no plans to reduce its workforce at the time being. Currently, Hapag-Lloyd has around 13,000 employees.
The carrier has been implementing a number of measures designed to save an amount in “the mid-triple-digit million range” to safeguard its profitability and liquidity. This includes adjusting service network to the lower demand and seeking savings in all coast categories, Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd AG, said in May.
Specifically, due to the current situation, Hapag-Lloyd has reduced frequencies, made network adjustments and discontinued some of them.
Additionally, all investments considered to be non-essential, such as ordering of new boxships, have been delayed.
Contributing to Hapag-Lloyd’s cost-saving efforts are two important factors in the container shipping industry — stable container freight rates and significantly lower-than-expected bunker prices. Stability in freight rates is due to the fact that carriers have started to idle ships after cancelling some services, leading to an increase in blank sailings. As a result, bunker consumption and container handling costs are lower. Moreover, shipowners are benefitting from cheaper bunker fuel prices caused by the pandemic.
Hapag-Lloyd has a fleet of 248 ships transporting around 12 million TEU per year.