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The container sector is the star of the show in terms of earnings right now, and demand is expected to remain at a high level. Nevertheless, Rolf Habben Jansen, the CEO of Hapag-Lloyd, Germany’s largest liner, remains careful in his predictions about what’s next. Habben Jansen believes that despite the unexpected boom in demand since the second half of last year, looking far ahead into 2022 is very difficult, especially with volatile market conditions and current infrastructure challenges. Further complicating matters, the pandemic's development remains uncertain. "However, we remain cautiously optimistic," says Habben Jansen. As analysts expect the extraordinary current rates to pass as well as the current squeeze on ship capacity, the Dutchman, who’s been at Hapag-Lloyd‘s helm since 2014, notes it is important to consider that the current rate discussion is only about spot rates. "As of today, we are still loading containers at 2020 rate levels, which means that customers with medium and long-term contracts are not affected by the current rate development,” he argues. The drive to reduce emissions will most likely accelerate the need for a renewed global fleet On average, container rates were at Hapag-Lloyd about $400 more per teu in the first quarter of 2021 compared to the same period last year. For its interims, Hapag-Lloyd revealed it earned more in six months than in the previous 10 years. In terms of ordering new capacity, Habben Jansen reckons the liner sector is still not close to the order boom seen in 2008 and 2009, and he doesn’t see that much of a risk that the book will grow again to such a size. "Last year we already said that the orderbook was a bit too small, as too many shipping companies were reluctant to invest after 10 years of losses. We expect a slight increase in demand and an increase in scrapping of vessels, and in addition, stricter environmental regulations and the drive to reduce emissions will most likely accelerate the need for a renewed global fleet," he tells Splash Extra. The Hamburg-based company made headlines recently with six megamax orders and the addition of ten 13,000 teu neo-panamax containerships. Larger ships are justified by economies of scale – the larger, the more cost-efficient. However, Habben Jansen also notes that as ships get bigger and bigger, the additional cost savings become smaller and smaller. When it comes to port congestion issues, he believes it will continue in the months to come – mostly due to continuous high demand, full ships, and Covid-19-related restrictions. Today, the sector looks pretty much consolidated. But to entertain the idea of creating maybe three or four top carriers for Habben Jansen is something he deems highly unlikely. "We don't believe that we are going to see mergers among the top players in container shipping within the next few years. Our industry has seen lots of consolidation in recent years. Synergies from larger combinations will be limited, valuations are high right now and competition authorities will have a very close look and might impose harsh restrictions on any major merger that could come up,” Habben Jansen reckons. Whether we are looking at a fundamental shift in the market, Habben Jansen says that is currently very difficult to assess. "We expect to see a strong market in the next quarters – visibility beyond that is limited,” he concludes.

The coming months for liner shipping

An interview with Rolf Habben Jansen, the CEO of Hapag-Lloyd

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