hapag lloyd plan for success

Hapag Lloyd’s Three-Part Plan For Container Shipping Success

Thus far, 2015 has been a year of significant growth for Hapag-Lloyd. The company’s rising revenues, fleet numbers, and investor confidence are all signs of improvement. This performance is certainly deserving of some recognition, particularly in an industry that has been repeatedly challenged for nearly a decade. Given the status of some of the company’s competitors in the container shipping industry, Hapag-Lloyd’s performance is more than admirable.

hapag lloyd makes up ground on competition

We have good momentum, our results have improved and we have made up ground versus our competition.- Chief Executive Officer, Hapag-Lloyd

This past year (2014-2015) has seen Hapag-Lloyd implement a strategy that will keep the company competitive for many years to come. The plan involves establishing key partnerships, raising funds for international expansion, the purchasing of larger container ships and investing in containers.

Hapag-Lloyd has a 3-part plan for success: partners, investors, and its maritime shipping fleet. Click To Tweet

Establish Partnerships.

In April of 2014, Hapag-Lloyd and CSAV approved a merger that resulted in the world’s fourth largest container shipping line. This acquisition helped Hapag-Lloyd reach new markets and achieve higher profits for much of 2015.

Fact: Following the acquisition of Compañía Sud Americana de Vapores (CSAV), Hapag-Lloyd reported its first interim profit in three years, recording €157 million for the first half of 2015.

Investment For Expansion.

After completing the takeover of CSAV, Hapag-Lloyd was able to raise 370 million euros ($430 million) from two of its biggest shareholders. In December 2014, billionaire Klaus-Michael Kuehne provided 111 million euros and CSAV added another 259 million euros.

In September 2015, Hapag-Lloyd began a $400 million IPO process that, with an investment from two of its core stakeholders – CSAV and Kuhne Maritime, increased $100 million, to $500 million.

The IPO is an important milestone for Hapag-Lloyd … good for our customers, our people and our shareholders.- Chief Executive Officer, Hapag-Lloyd

Improve Maritime Fleet.

As mentioned earlier, the intention of the added investment (and IPO) was primarily to allow Hapag-Lloyd to use the proceeds to fund “further investments in ships and containers.” That was their intention, and that is what they have done.

Scheduled for delivery between October 2016 and May 2017, Hapag-Lloyd ordered five 10,500 TEU container ships in April 2015. Outfitted with 2,100 refrigerated plugs each, the new container ships will transport fruit, vegetables, fish and pharmaceutical products in the South American market.

Hapag-Lloyd’s merger with CSAV introduced the container shipping leader to the Latin American marketplace. To capitalize on new-found opportunities in South American trade, Hapag-Lloyd ordered 6,000 reefer containers in August 2015. This container investment is expected to provide the resources necessary to transport certain fruits and vegetable from areas like Brazil, to major shipping ports around the world.

hapag-lloyd reefer fleet is growing

With our enhanced reefer fleet, we are ideally positioned for the Latin American trade, which is an important part of the reefer business.- Chief Executive Officer, Hapag-Lloyd

Smooth Waters Ahead.

It is not only company profits that are upbeat. The CEO maintains a positive outlook on the future of the container shipping industry, as well. According to the chief executive of Hapag-Lloyd, the chronic overcapacity that has consistently contributed to the extreme rate volatility and lower carrier earnings on major container shipping routes, is set to ease. This is more great news for Hapag-Lloyd and shipping industry investors.