Houston — German container carrier Hapag-Lloyd predicts strong financial results for the first-quarter 2021 amid high freight rates and firm consumer demand, the company said Feb 16.
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Register NowThis comes even as global container trade is plagued by port congestion and prolonged equipment shortages.
"We are still seeing slower container turn times, significant congestion in ports around the globe, capacity constraints in rail and truck, and the risks of the coronavirus pandemic remain," said Hapag-Lloyd CEO Rolf Habben Jansen. "Nevertheless, we do also expect that the result for 2021 as a whole will be significantly higher than the prior-year level."
This is due in large part to freight rates being at or near record highs on major trade lanes.
The Platts Global Container Index, a weighted average of all Platts' container rates, was assessed Feb. 16 at $4,213.41/FEU, up from the Dec. 1 assessment of $2,756.35/FEU
Consistent with general market sentiment, Hapag-Lloyd expects market activity to ease and return to some stability before year-end.
"We anticipate a normalization as the year progresses," Jansen said.
The company expects Q1 EBITDA to be at least $1.8 billion. This represents more than a threefold increase on the year, when Q1 2020 EBITDA was $517 million.
In 2020, S&P Global Ratings upgraded Hapag-Lloyd's credit rating to "BB-" from "B+" with a positive outlook.
Speaking at a forum earlier in February, Uffe Ostergaard, Hapag-Lloyd's North America president, said the company was in for "a prolonged period of bottlenecks that we are expecting to last until summer around the end of the second quarter."
Hapag-Lloyd has a fleet of 234 ships and a capacity of 1.7 million TEUs.