Hapag-Lloyd loses US$302 million as rates, volumes shrink in Q1

GERMANY's big container line, Hapag-Lloyd, suffered a US$302 million loss in the first quarter from a $24.5 million profit it made in the same period last year, said the company, the world's fifth largest container carrier.

Quarterly revenue fell 23 per cent to $1.5 billion year on year from $1.9 billion as traffic shrunk 15 per cent and freight rates fell 14 per cent year on year, reported Newark's Journal of Commerce.

Continued decline is expected for the rest of the year because of the global economic slow down, according to TUI AG, the German travel giant, which still holds 43 per cent of the carrier, even after it sold the lion's share to the Hamburg-based Albert Ballin consortium, which now holds 57 per cent.

Commerzbank, a German bank, has forecast Hapag-Lloyd will lose $545 million in 2009.

But Hapag-Lloyd has embarked on a major cost cutting programme in which $675 million in spending is targeted in a restructuring that involves layoffs, short time working and the closure of regional offices.

Source: Transportweekly