Hapag-Lloyd raised its full-year earnings, citing stronger-than-expected demand and higher freight rates despite increased expenses from the diversion of vessels around the Cape of Good Hope, according to Reuters.
As stated by Reuters, Hapag-Lloyd says that it now expects earnings before interest, taxes, depreciation, and amortisation (EBITDA) for 2024 of between $4.6 billion and $5 billion, up from previous guidance of $3.5 billion to $4.6 billion. Reuters reports that Hapag-Lloyd stated that despite given very volatile freight rates and major geopolitical challenges, the forecast is subject to a high degree of uncertainty.
Attacks on international shipping in the Red Sea by Houthi militants in Yemen since late last year have forced shipping companies to reroute traffic away from the Suez Canal to the longer route through the Cape of Good Hope around Africa.
Moreover, a spokesperson for Hapag-Lloyd told Reuters that the transport times are much longer, which is why Hapag-Lloyd needed significantly more capacity and bought capacity.
Despite this, demand was relatively high and capacity was scarce or is still scarce according to the reports. The spokesperson noted to Reuters that when capacity is relatively tight, rates simply go up and this was particularly the case on the Far East to Europe route.
