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German container shipping company Hapag-Lloyd is benefiting from the rebound in transportation demand, but the company’s chief executive has warned about the long-term impact of the coronavirus on economic activity.

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“We see that the recovery may begin sometime in the third quarter, and we expect this recovery to continue until 2021,” the company’s chief executive Rolf Habben Jansen said at a press conference on Thursday.

“But the new crown pneumonia will have a significant long-term impact on the global economy and will have an impact on the flow of goods,” he added.

The world’s fifth-ranked container liner company will release a nine-month earnings report on November 13. While maintaining full-year expectations, the company’s net profit in the first half of 2020 has doubled.

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Habben Jansen said that cost reductions, lower shipping fuel prices compared to the same period last year, and recovery in demand, especially on trans-Pacific routes, have boosted Harpa-Lloyd’s profitability.

In recent weeks, many banks have been raising Hapag-Lloyd’s target prices, citing stronger freight prices.

The company’s share price is not far from the seven-week high of 53 euros set on Wednesday, although it has fallen sharply from the historical high of 187 euros set in May this year.

Facts have proved that its rival, Maersk, has also shown resilience in the crisis.

Habben Jansen said that freight rates on Asia-Europe routes have increased in recent weeks, while freight rates on other routes have remained stable, as are the current fuel prices.

However, the brokerage firm estimates that by 2020, global transportation volume will drop by about 11% every year, which means that operators must adjust capacity according to demand to protect revenue.

This article is reproduced from State Reading Network.

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Post time: Oct-12-2020