German container carrier Hapag-Lloyd has cut its profit outlook for the year 2018 amid a challenging and volatile environment for ocean carriers.
A Reuters report quoted the shipper saying that freight rates had recovered more slowly than expected while fuel and charter costs had ballooned.
The report said that these developments cannot be fully offset by cost saving measures that have already been initiated.
Hapag-Lloyd also referred to the uncertainty regarding the development of freight rates in the upcoming peak season as one of the factors for the outlook revision.
According to a note to its investors, the reason for the revision is "an unexpectedly significant and continuing increase in the operational costs since the beginning of the year, especially with regard to fuel related costs and charter rates combined with a slower than expected recovery of freight rates.
According to a Bloomberg report, Shares of the German shipping line plunged as much as 22 percent after the company cut its profit forecast for the year, as overcapacity in the industry combined with rising fuel costs to put a squeeze on profit.