Nils Haupt, senior director, corporate communications at Hapag-Lloyd, discusses the shipping firm’s decision to divert vessels away from the Red Sea given ongoing geopolitical tensions.
Good morning from Hamburg basically this Monday we decided to continue for the next 7 days to avoid the Red Sea and the SS can now and uh go through the cave of good hope that means much longer travel times and of course additional cost um Neils it does mean additional
Cost but I presume the in Insurance uh for certain acts uh will go down aggressively for those shipments as well and and I’ve got to be brutally honest with you I’ve taken to look at uh your share price and the sector’s share price since the start of this awful crisis and
And that is the the backdrop of course your Shares are through the roof since middle of December as well so yes more costs but you’re passing on all of those costs and more aren’t you sir well we’re passing on the cost we are having uh I mean you just have to
Imagine that when you go from Singapore to the east Med which normally would be like 10 days will now be 18 days longer so this is 3 weeks weeks more fuel consumption this is 3 weeks more using of the vessel uh 3 weeks more travel time for the cruise so this is simply
Something which you have to pass on to the customers and then some though because it would appear from again the industry’s share price and the fact that shipping container rates are up somewhere in the region nearly 200% in some cases that there is an accusation that the industry is not only passing on
The cost but actually passing on more than the costs I don’t share that view you know I mean a few few years ago or let’s say one year ago I mean share price have been still very high and share prices have gone down a lot in the last weeks
And months and we were facing again a time like pre-o even less than pre-co a container from Hamburg to Singapore in the last months was like 100 US and the container which normally from Singapore to Northern Europe was like 50 00 was below $1,000 us so I mean this industry
Has faced a lot of downturn in the last weeks and months and I think this is just going back to normaly it is not that you know we are making our pockets full Neils away from Price there are also concerns about the impact on Supply chains and by numbers what 20% of the
World’s containerships are avoiding the Red Sea this according to the international chamber of shipping there was a view as this started that the longer this went on for the more impact on Supply chains that have been repairing since the co pandemic what impact are you now expecting I don’t really see that as
Dramatic as we have seen the situation during covid I mean we shouldn’t forget that covid was a global crisis and that we have seen disruption of the supply chain on a global base what we are now seeing is more like I shouldn’t say a local crisis but it is more um when you
Look at far east Europe when you look at Far East Us East Coast yes this is this has a huge influence but this will mean delays and this will mean some congestion perhaps in some selected ports but it is by far not the same situation as we have faced the last two
Or three years what’s the ESG impact we know the industry has been pushing in One Direction thanks to regulation but as we’re talking about longer sailing times as well there must be ESG consequences yes there are consequences but on the other hand there is lots of capacity I mean during Co many Shipping
Lines have ordered new ships all these ships are now coming into the system and there is enough capacity to deal with the demand and and to compensate the longer travel times we are seeing I would not expect that we are running out of capacity in the next two three four
Months can I ask you about the approach now from the US UK and other Western countries that have been threatening to push back against houie Rebels with direct attacks so far they’ve been shooting down missiles but now the the escalation they’re talking about suggests there could be attacks on some
Of the houthi rebels themselves how hard would this be to achieve and would it actually bring any deescalation by having a more um more of a hot Conflict at this point very difficult to say we are not politicians but what we can say for the moment we don’t seem The Passage
Through the Red Sea and the sus Canal safe we had an attack in December uh you can imagine how hard that was not only for us as a company but especially for our crew um there were several attacks in the last days and as long as uh the
The passage to the Red Sea and the Su Canal is not safe we won’t pass Neil as whil we’ve got you if I may expand the conversation just briefly mate to to to the broader Outlook as well we’re all waiting to see whether the stimulus efforts from the pboc from
The Chinese government are actually going to meaningfully shore up the concern that we all have and I’m sure hapag lyd has as well about flow in and out of China and the industrial activity there what’s the latest as far as you can see in terms of the Chinese
Recovery well what we are seeing right now we are running into the Chinese New Year so before Chinese New Year there is lots of demand of course out of China into northern Europe and also um into the US and Canada uh what we have to expect as of mid of January China
Basically will be closed for two years there will be less demand and of course less less Transportation as well on the longer term We Believe China will stay the factory of the world yes there might be some shifts but China is and will stay to be the big Factory for for the
Global citizens