Nearly three months after the outbreak of the Iran conflict, Hapag-Lloyd sees no immediate end to the shipping challenges in the region. 'Alternative routes, high energy prices, and existing restrictions will continue to result in above-average transport costs in the coming quarters,' CEO Rolf Habben Jansen stated on Wednesday during the virtual annual general meeting of the world's fifth-largest container shipping line. The duration and impact of the Middle East conflicts on freight rates, demand, and costs remain uncertain. Hapag-Lloyd already felt the impact of maritime blockades in the first quarter, slipping into the red at the EBIT level, partly due to other factors such as severe weather.

Germany's largest container line, like virtually all major competitors, is struggling with shipping blockades in the Middle East. The Suez Canal has long been avoided due to the threat of attacks by Houthi rebels from Yemen. With the outbreak of the Iran conflict in late February, the blockade of the Strait of Hormuz was added to the challenges. Shipping companies are diverting their vessels onto lengthy detours, which is driving up costs.

'About five percent of our total global volume passes through the Strait of Hormuz,' said Habben Jansen. This route thus represents a smaller portion of the operating business for the Hamburg-based shipping company and its fleet of over 300 vessels. However, the disruptions are weighing on operations, and the company continues to work in crisis mode - not least because of several ships currently stuck in the Gulf.

In the meantime, however, operational processes have been stabilized, the Hapag-Lloyd CEO said. Most container backlogs have now been cleared, and ports in the region are back in operation. Hapag-Lloyd bookings for the Upper Gulf region, which were initially suspended, were resumed in May. This was made possible by pivoting to overland transport and feeder services.

(Report by Elke Ahlswede, edited by Myria Mildenberger. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)