Hapag-Lloyd Targets Cuts to Costs, Emissions; Aims to Outpace Market Growth — Update

By David Sachs

Hapag-Lloyd outlined new targets to slash costs and emissions by 2030 while growing at a pace slightly faster than the market.

The German shipping company wants to cut costs by 20% per container, Chief Executive Rolf Habben Jansen said Tuesday during a press conference about its strategy for rest of the decade.

Jansen said the company will use bigger ships, which bring down individual shipping container costs, and limit fuel expenses by sailing slower. He added that Hapag-Lloyd can increase productivity faster than inflation.

Hapag-Lloyd's growth should outpace the market through 2030, goal supported by investment in Africa, India, and Southeast Asia, according to the CEO. Jansen reiterated his goal to invest in more terminals--he aims to add up to 15 by 2030--and inland logistics.

The firm plans to cut its carbon emissions intensity by 50% by 2030 via newer, cleaner ships, sailing more slowly, and tech to reduce fuel consumption at sea, Jansen said. Previously, the company had targeted a 30% decrease.

Larger fleets, which can lower fuel consumption per cargo unit and optimize routes and scheduling, will also contribute to reaching the goal, the CEO said.

The conflict in the Middle East, which led the company to reroute ships around the Cape of Good Hope, will continue to hit efficiency in the short-term, Jansen said. However, he said the company views the problem as temporary.

Hapag-Lloyd said in March that it expects significantly lower earnings this year due to weak demand and the effects of the Red Sea shipping slowdowns.

Write to David Sachs at david.sachs@wsj.com

(END) Dow Jones Newswires

April 16, 2024 07:46 ET (11:46 GMT)

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