Hapag-Lloyd has announced that it has invested around €550 million ($657 million) in new containers to address the severe shortage faced by shippers and carriers around the world.
The carrier said it is one of the largest container orders in its history as it continues to struggle with lengthy container lead times and said it “needs significantly more boxes than normal to carry the same volume.”
According to a recent analysis by Drewry Shipping Consultants’ senior container equipment analyst John Fossey, the typical turnaround time for a container in the Asia-Northern Europe trade before Covid was about 65 days; now it is about 100 days.
In response, Hapag-Lloyd has ordered 150,000 teu of dry boxes and reefer containers from Chinese manufacturers, some of which have already been integrated into its fleet this year. Most are expected “in the coming months,” he added.
It has also placed an order for 8,000 teu of special containers to be used for out-of-gauge cargo or dangerous goods.
Carrier CEO Rolf Habben Jansen said, “The container shipping industry is experiencing unprecedented demand, which has led to a worldwide container shortage. With its recent container orders, Hapag-Lloyd is contributing to efforts to alleviate the current situation and will be able to offer its customers a much better service.”
Last week, Mr. Habben Jansen said the German carrier had also introduced a policy of releasing containers to shippers later than before Covid: “each later release day releases several thousand containers.”
And the increased demand for new containers is being felt among major Chinese manufacturers. This week, the largest of them, China International Marine Containers (CIMC), issued a profit warning to the Hong Kong Stock Exchange, saying it expected a first-quarter profit of between $199 million and $252 million. This would be a very significant turnaround from the Q1’20 loss of $100 million.
The company had this to say, “In the first quarter of this year, the group’s dry container and reefer container sales volume increased by 174% and 82%,” it said.
However, this has also meant that container manufacturing capacity has remained very tight and could lead to the creation of operations elsewhere; for example, India seems increasingly keen to encourage growth in its domestic manufacturing capacity, according to reports.