SSG No 10 - Shipgaz

SHIPPING AND SHIP MANAGEMENT
SkySails is a kite towing system that is said to reduce fuel costs by 10–15 per cent.
Many shipping companies meanwhile
have increased their own intakes of trainees
and created new training facilities on ships.
Among those to announce expanded training
of late have been Hamburg Süed, Beluga
and Reederei NSB. Reederei Gerd Bartels
has donated modern engine parts to a
local training establishment so that students
can use up-to-date equipment.
Problems the past year
Three of Germany’s biggest shipping companies
have faced problems this past year.
Hapag-Lloyd experienced losses, Hamburg
Süd reported difficulties and Senator Lines
saw service and job cutbacks.
Hapag-Lloyd, with 141 container ships
of more than 480,000 TEUs, has had a
downhill struggle with its integration of CP
Ships, posting a loss of EUR 106 million in
2006 after two years of record earnings.
Declining rates and CP integration costs
led to the loss, which contrasted with a
profit of EUR 319 million in 2005.
Increased bunker, landside logistics and
charter rate costs also cut profits, Hapag-
Lloyd parent TUI reported. At the same
time however turnover was up 63.1 per
cent to EUR 6.3 billion in 2006 because of
the CP acquisition and volume rose from
4.8 to 6 million TEUs.
Now that integration is complete,
resilient Hapag-Lloyd can surely look forward
to a restoration of fortunes. TUI predicted
an operating profit of EUR 400–500
million for shipping next year.
It said it expected an 8–9 per cent
increase in container shipping volume this
year and in 2008 with sales of up to seven
billion Euros in fiscal 2007. It also says
expected synergy savings of some EUR 220
million from CP will kick in this year.
A good step towards better business has
been made this year by Hapag-Lloyd with
a strengthened China-Red Sea service and
a new Asia-Black Sea service. Stiffening the
Europe-Far East fleet are two new 8,750
TEU ships with the Grand Alliance, the
first of five. Hapag-Lloyd’s Adolf Adrion
speaks for all: “China is the engine of the
world economy and globalisation and thus
also drives ocean shipping”.
Speculation about Hapag-Lloyd ownership,
however, given the current ups, and
earlier downs, of TUI, continues to fuel the
fantasies of commentators.
No takeover
There was a time when a merger between a
dominant Hapag-Lloyd and Hamburg
Süed looked possible. Now August Oetker
has been quoted as saying his Group, the
parent company of Hamburg Süd, has no
interest in a take-over of Hapag-Lloyd.
The German reefer specialist has however
moved in other directions to strengthen
its position. It has intensified co-operation
with Maersk on north-south America container
services and with Maersk and NYK
in Asia–South America service. It has also
doubled the capacity on its new Trident
service between Europe/Australia–New
Zealand.
Hamburg Süd has predicted handling
this year of 1.9 million TEUs, including
about 210,000 reefer containers, after what
Board Member Joachim Conrad described
as a “difficult” but “still satisfactory” year.
Volume in 2006 rose 21 per cent, or
more than twice the market average, to
1.84 million TEUs from 1.52 million TEUs
in 2005. Conrad acknowledged that two
thirds of the growth came from acquired
Russian shipping firm Fesco.
Turnover in 2006 rose 5.2 per cent to
EUR 3.2 billion, 85 per cent of which
came from liner trades which showed
‘only’ eight per cent growth last year after
a much bigger increase in 2005. One main
reason for the decline was rates, which
Hamburg Süd said came under considerable
pressure.
Hamburg Süd liner shipping slot capacity
grew slightly to 201,000 TEUs in 2006
and the company operated 88 container
ships by year’s end, in a total fleet of 139
ships also including 51 bulk carriers and
product tankers.
Digesting huge costs
In addition to the ten Monte Class 5,500
and 5,900 TEU newbuildings for delivery
in 2008, Hamburg Süd has just this year
also ordered six more 6,300 TEU Santa
Class ships. Reportedly costing EUR 380
million, they are due into service from
2009.
As usual, Hamburg Süd revealed no
profit figures. It indicated however that
German shipping future? Experts differ.
58 SCANDINAVIAN SHIPPING GAZETTE • MAY 21, 2007