Hapag and ONE Point to “Considerable Uncertainty” Expecting Lower Results
Hapag-Lloyd and Ocean Network Express (ONE) both released financial results today, April 30, providing the first outlook among the major carriers for 2025 based on the ongoing trade war and U.S.-driven tariffs. The carriers cited strong first quarter demand while reporting a quick falloff and “many uncertainties” for 2025 leading to lower financial expectations.
“We have gotten the current 2025 financial year off to a good start,” Rolf Habben Jansen, CEO of Hapag-Lloyd told shareholders at the company’s annual meeting. “But the market environment is currently characterized by many uncertainties resulting from a series of protectionist measures.” Jansen said that all parties in shipping and trade with the U.S. are now “looking to see what concrete impacts these measures will have.”
He pointed out that globally 22 percent of container traffic is tied to the United States while for Hapag about 27 percent of its cargo volume is tied to the U.S. Last week, Hapag warned that up to a third of shipments scheduled from China to the U.S. had already been canceled. Many carriers have also reported removing capacity from their trans-Pacific routes as freight rates have also declined.
It has been suggested by analysts and many sectors of the industry that shippers rushed products to the United States during the first quarter to beat the pending tariffs. Hapag pointed to nine percent increases both in its volume and freight rates during the first quarter contributing to its strong results.
Hapag booked a 17 percent increase in its first quarter earnings (EBITDA) to $1.1 billion on revenues of $5.3 billion. While warning that it continues to expect lower results for 2025, the company maintained its forecast for the year calling for EBITDA earnings of between $2.5 billion and $4 billion, after having reported nearly half the low end of the range during the first quarter.
The outlook for 2025 they said is subject to “considerable uncertainty due to the volatile development of freight rates and major geopolitical challenges.” Among the issues Hansen also noted for the market is the continuing increase in fleet capacity noting that while it will be slower than in 2024, capacity growth is likely to exceed the increase in demand this year. Capacity could also be released if safe passage is restored through the Red Sea.
ONE similarly said, “Considering the prevailing geopolitical landscape, and the significant instability introduced by recent tariff developments in April, forecasting a precise full-year profit figure for financial year 2025 presents considerable challenges.”
In the most dire case presented by ONE, it said profits could be down by three-quarters in 2025. It cited the potential for a decline of $850 million saying profits could be as low as $250 million. ONE reported that since February and the Lunar New Year holiday, it has been experiencing weakness, especially on east-west routes. It pointed to emerging issues saying the recovery on the routes was lagging and a downward trend in rates.
ONE pointed to its expansion in its network and new service offerings as well as the newly established The Premier Alliance.
Hapag reported it would be moving forward with its current strategy with a focus on quality, efficiency, and decarbonization. It said it would also be watching costs in the year ahead. Hapag is also expanding its terminal operations pointing to an acquisition in Le Havre, France, the opening of the Tuticorin terminal in Inda, and extended concessions in Florida and Haldia, India.