Freight News, Sea

Hapag-Lloyd Makes Largest Reefer Order Ever, Realizes Profitable First Half 2015

[ August 26, 2015   //   ]

In a recent press release, Hapag-Lloyd reveals that the steamship line is investing a double-digit million amount in its container fleet. That investment includes 6,000 (12,000 TEU) of the latest generation of reefer containers. Such increased transport volumes should benefit Hapag-Lloyd on East-West trades and, especially,

North-South and Latin American trades.

The company is already one of the largest reefer carriers in the world today.

“We operate a state-of-the-art reefer fleet that is the fourth-largest in the world,” says Rolf

Habben Jansen, Chief Executive Officer of Hapag-Lloyd AG. “With the new reefers, we are expanding our leading position even further in this specialized business with its specific demands and will thus benefit from the growing reefer market.”

Jansen contends that the enhanced reefers will ideally position Hapag-Lloyd for the Latin American trade, regarded one of the strongest reefer markets in the world. It’s happening right in time for the opening of the expanded Panama Canal in 2016.

In April the steamship line had already ordered five new 10,500 TEU ships with a high

number of slots for reefers. Each ship can accommodate up to 2,100 reefers. The ships are to be used primarily on trades to and from South America The new reefers are to be gradually

integrated into the container fleet, starting in the coming weeks.

In a separate press release dated August 26, the company reported that during the first half of 2015 it increased transport volumes and revenue as well as earnings. Volume growth was driven by the merger with Compañía Sud Americana de Vapores (CSAV), which made Hapag-Lloyd the fourth largest carrier globally by capacity.

The transport volume increased to around 3.7 million TEU in the first six months of 2015, up 29.4% compared to the same period in 2014 and mainly due to the merger with CSAV. Earnings increased as a result of initial synergies from the CSAV merger and additional cost savings from the OCTAVE program.

The transfer of CSAV’s services and ship systems into the various trades of Hapag-Lloyd was completed in the second quarter of 2015, slightly ahead of the original plan. Now that the integration is almost completed, Hapag-Lloyd targets net annual synergies of around $400 million fully realized by 2017. This is $100 million higher than originally anticipated.

The cost and efficiency program OCTAVE initiated in 2014 is expected to deliver annual improvements of approximately $200 million as of 2016. OCTAVE includes improvement initiatives in several areas such as procurement and further fleet modernization.