Bruce Barnard, Special Correspondent | Aug 14, 2012 8:42AM EDT
German ocean carrier Hapag-Lloyd’s net loss narrowed to 7.3 million euros ($9 million) from 10.6 million euros ($13.1 million) a year ago as surging fuel costs more than outweighed slightly higher freight rates and a strong dollar.
Operating profit increased, however, to $38.2 million in the three months to June 30, from $32.2 million in the same period in 2011, as revenue jumped 21 percent to $2.2 billion from $1.8 billion.
Container traffic stalled at 1.36 million 20-foot-equivalent units compared with 1.34 million TEUs a year ago. The average freight rate increased just $63 to $1,594 per TEU, but there was a bigger impact on the euro bottom line because of a “markedly stronger” U.S. dollar.
Hapag-Lloyd said further freight rate increases are “unavoidable” to offset higher fuel bills.
“High bunker prices in particular case our expenses to increase dramatically — they are by far the biggest cost factor for our business,” CEO Michael Behrendt said.
”Further rate increases are crucial to compensate for these elevated external costs. The cargo on board our vessels has to cover the cost of transportation,” he said.
The net loss in the first half widened to $173.2 million from $40.5 million as revenue rose to $4.2 billion from $3.7 billion.
The Hamburg-based carrier said its goal of posting positive operating earnings for the full year hinges on its performance in the peak shipping season and success in pushing through further rate hikes.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
