German shipping company Hapag Lloyd expects delivery bottlenecks and high prices for container freight to start easing in the second quarter, its chief executive said.
Assuming the current wave of the coronavirus pandemic is over, the loading and unloading of ships should function more smoothly, helping to reduce the lines of vessels waiting off the west coast of the United States, he said.
“As soon as we have the current Omicron wave behind us, most people should be able to go to work again,” Rolf Habben Jansen told journalists on Monday evening.
Habben Jansen said that his prediction assumed there would be no further delays as a result of wage negotiations for U.S. dockworkers, adding that it could take six to eight months after the second quarter for the market to normalize.
However, he does not assume that prices will return to the level of 2018 and 2019 due to increased costs including for fuel.
The pandemic has caused freight rates to soar, helping companies like Hapag Lloyd to post record profits, which Habben Jansen said should be distributed in part to shareholders, while the company also plans to buy more ships and containers.
Habben Jansen denied that shipping companies were keeping cargo space tight to buoy prices: “Every ship we have is going to be used. We’re certainly not holding back capacity.”
Unlike some other shipping companies, Hapag-Lloyd is not thinking of entering the air freight business. “We don’t see operating an airline as a logical extension of what we do.”
The world’s largest container shipping company MSC and German carrier Lufthansa want to buy the majority of Alitalia successor ITA Airways.
(Reuters - Reporting by Jan Schwartz, writing by Emma Thomasson; Editing by Kirsten Donovan)