[110218.EN.SEA] Hapag-Lloyd Sees Mergers Ahead, And Shipping Growth Rising 4pc in 2018

GERMAN shipping giant Hapag-Lloyd expects demand for transport to grow four per cent this year and sees more carrier mergers ahead, Reuters reports.

'Some nine of formerly 20 companies will have disappeared by the end of 2018,' said Hapag-Lloyd CEO Rolf Habben Jansen.

The firm's 2017 nine-month operating profit was up tenfold year on year, but the company retained US$7.3 billion in debt.

If there were a game changer on the horizon, he said, it was rising oil prices, now at three-year highs, were pushing up the cost of bunker, presenting a challenge for shipping firms.

Hapag-Lloyd, which merged with Kuwait's United Arab Shipping Co (UASC) last month, he said could achieve 85 to 90 per cent of targeted annual savings from the deal of US$435 million this year and 100 per cent from 2019.

After the UASC merge he said Hapag-Lloyd is now the world's fifth biggest company. More savings could be made in future, Mr Habben Jansen told reporters in Hamburg, where he reiterated guidance for rising full-year 2017.saying figures would be published on March 28.

'We have many new ships which have made us absolutely competitive, there is a great difference to four or five years ago,' he said.

Shipping has struggled with overcapacity, price wars and freight rates far below break-even levels, but industry analysts say the worst may be over.

Source : World Shipping.