By Dominic Chopping
Hapag-Lloyd confirmed its full-year guidance while cautioning that global trade conflicts and continuing disruptions in the Red Sea could significantly hit supply and demand in the container shipping industry this year.
The German shipping company, the world's fifth-largest container line by capacity, said it had a good start to 2025, but warned that the situation in the Red Sea and the impact of global tariffs and trade policies continue to be causes for concern, bringing with them considerable uncertainty.
"We will continue to implement our Strategy 2030, vigorously focus on our costs and target additional savings of more than $1 billion within the next 18 months," said Chief Executive Rolf Habben Jansen.
U.S. President Trump's trade policy has clouded an already uncertain outlook for the industry as it continues to divert ships on longer routes to avoid hostilities in the Red Sea. U.S import tariffs have made it difficult to judge where container demand might be headed with Hapag-Lloyd rival Maersk last week noting that it had seen volumes between the U.S. and China drop by 30% to 40% since the beginning of April.
The industry was handed a reprieve earlier this week though, after the U.S. agreed to lower the base level of tariffs on most Chinese goods to 30%, from 145%, while China said it would cut its duties on U.S. imports to 10% from 125%.
Still, Hapag-Lloyd said it remains unclear when passage through the Red Sea will be safe again while the U.S. import tariffs have added considerable uncertainty among customers, initially weighing on demand.
"Against the backdrop of ongoing negotiations between key exporting countries and the U.S. on the mutual dismantling of trade barriers, the short- and medium-term effects of the conflict cannot be reliably assessed," it said.
The company reported earnings before interest, tax, depreciation and amortization of 1.01 billion euros ($1.13 billion) in the first quarter, up from 835 million euros a year prior, and in line with company guidance of around 1 billion euros.
Volumes and average freight rates both grew nearly 9% on year, on strong demand. China exports and U.S. imports both increased sharply in the first months of the year as companies moved to ship goods ahead of the anticipated rise in U.S. tariffs.
Earnings before interest and tax rose to 462.8 million euros, versus company guidance of around 500 million euros.
Revenue rose 19% to 5.05 billion euros.
The company still expects group Ebitda of between 2.4 billion and 3.9 billion euros in 2025 and EBIT of between zero and 1.5 billion euros, though it noted that the volatile development of freight rates and major geopolitical challenges mean guidance is subject to considerable uncertainty.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
05-14-25 0318ET
