Hapag under pressure

German container line Hapag-Lloyd has racked up a big loss in the first quarter as rates stayed “far too low.”

The net deficit to 31 March was EUR 119.1m ($163.8m) from a loss of EUR 93.6m in 2013, but the 2014 figure includes one-off costs related to the imminent merger with Chile’s CSAV.

The company said it had “competed well”, despite a very challenging market, persistently high fuel costs and aggressive competition, however.

Revenue dropped to EUR 1.55bn from EUR 1.65bn, with rates under “considerable pressure”.

The average daily fee per box was $1,422 per teu, down $124 per teu year-on-year.

Volumes were up by 5.5% to 1.4m teu, however.

The owner further reduced transport costs by EUR 86m to EUR 1.4bn, while other costs including container leasing were cut by EUR 53m.

Bunker costs dropped from $627 per tonne to $595 per tonne, but it said this still represented a “very high overall level that cannot be compensated for in any way by current freight rates.”

Operating losses were EUR 63.2m from EUR 53.2m in 2013.

The company is aiming to improve rates this year.

“Our success in achieving this target will depend largely on the development of freight rates in the second half of the year and, above all, on the peak season,” said CEO Michael Behrendt.

“With the expansion of the G6 Alliance to include all east–west trades, which is currently being implemented in our service network, together with the takeover and integration of CSAV’s container segment, which still has to be approved by the competition authorities, Hapag-Lloyd will again significantly improve its ability to compete.”

Liquidity reserves, including unused loans, stood at EUR 535m.