Hapag-Lloyd said it had profit in the third quarter of 16.6 million euro ($22.31 million), compared with 45.6 million euro in the same period last year, but said freight rates were “very disappointing.”
The Hamburg-based carrier said its profit came “primarily as a result of substantial cost reductions.”
Revenue in the third quarter was 1.66 billion euro, a decline from the same period a year earlier when it was 1.77 billion euro. The company said the decline in revenue was largely due to the exchange rate.
Hapag-Lloyd said its average freight rate in the third quarter was $1,476 per TEU, well below $1,647 per TEU in the same period last year.
Transport volumes were 1.39 million TEU, up 8.6 percent from 1.28 million in the same period a year earlier.
"The freight-rate developments in the third quarter, the peak season for the liner shipping industry, were very disappointing,” said Michael Behrendt, chairman of the executive board of Hapag-Lloyd. “But as in the second quarter, we were able to offset the adverse impact that this had on earnings with additional cost reductions. As a result, we can report a group profit for the third quarter, in spite of the difficult market environment.”
The company said “there has been no let-up in the pressure on freight rates in the fourth quarter, which is seasonally weaker anyway," and Behrendt added, "the irrational behavior in the industry, which once again caused rates to drop drastically in October, is totally incomprehensible."
Hapag-Lloyd said it has implemented additional November and December freight-rate increases. It said rate increases announced in the third quarter could not be achieved sufficiently in the market. This also had an impact on the average freight rate for the first nine months, which at $1,506 per TEU was 4.3-percent lower than the prior year when it was $1,574 per TEU. In contrast, the transport volume between January and September increased by 3.6 percent, year over year, to 4.11 million TEU.