German shipping major Hapag-Lloyd turns to loss amid Hormuz blockade

Germany’s largest container shipping company, Hapag-Lloyd, turned to a loss in the first quarter of the year, with the blockade of the Strait of Hormuz, severe weather and falling freight rates all contributing. 

In a statement on Wednesday, chief executive Rolf Habben Jansen blamed the volatile market environment for the poor results, announcing his intention to maintain strict cost discipline. 

Earnings before interest and taxes (EBIT) in the first quarter stood at €134 million ($157 million), down from a profit of €463 million in the same period last year. 

Overall profit fell to -€219 million, a decline of €665 million. 

Revenue fell by almost 17% to €4.2 billion due to falling freight rates amid stagnating cargo volumes. 

Towards the end of April, four of Hapag-Lloyd’s container ships were still stranded in the Gulf due to Iran's blockade of the Strait of Hormuz.

Jansen said at the time that the Iran conflict was causing additional weekly costs of around $50 million. He attributed this to rising fuel prices. Higher insurance costs are also likely to continue to weigh on the shipping company.