GERMANY's Hamburg Sud, owned by German food dynasty Oetker, is putting volume growth in the major east-west trades at the top of its agenda this year, reports IHS Maritime 360.
The carrier is also studying its options to become a vessel provider on east-west routes, which it currently serves through slot charter agreements with United Arab Shipping (UASC).
The company signed a global partnership agreement with UASC last year and commenced container liftings in the major east/west trades at the start of this year, said the report.
"I wouldn't exclude that we will begin to provide our own ships for these services in due course," said Hamburg Sud chairman Ottmar Gast.
The German line has traditionally focused on north-south and south-south services to and from Latin America, but some of its major markets, including Brazil and Argentina, are currently stagnating.
Mr Gast said there were two reasons behind the diversification. "First, we want to reduce dependence on Latin America. Further, we hope to achieve greater economies of scale and synergies [for overheads and land-based systems]," Mr Gast said.
The world's tenth biggest container carrier released a statement analysing its disappointing performance in 2014 and outlining plans for the future, reports Britain's Container Management journal.
"Overall, Hamburg Sud achieved a positive, albeit less than satisfactory result from liner services despite difficult market conditions," the statement said.
The company's cargo volumes grew by only 2.3 per cent to 3.4 million TEU in 2014 which the company characterised as "modest" growth.
This performance was blamed on weak economic development in Brazil, Argentina and Venezuela, leading to low, and in some cases negative, growth on the north-south trade lanes.
While, between 2012 and 2014, the Asia-Europe and Asia-North America trades grew by between three per cent and six per cent a year, the Latin America trade lanes in which the company specialises, only grew 1.5 per cent.
Highlighted as particularly disappointing were Brazilian and Argentinean imports, which hindered the company's business between North and South America and from Asia to the South American east coast.
With freight rates falling and a weak US dollar as the most important earnings currency, total sales fell by one per cent to EUR5.2 billion (US$5.6 billion).
Low freight rates were blamed on growing global slot capacity on container ships which, the company said, made it impossible to reduce existing overcapacity.
Although the carriers attempted to reduce capacity on the South America routes, especially in the off-season, capacity utilisation of the ship systems for large parts of the year was too low, the company said.
Ongoing overcapacity was also highlighted as the reason for unsatisfactory results on the service between India/Pakistan and Asia, as well as northern Europe.
These poor results were partly compensated for by the drop in fuel prices in the fourth quarter of 2014 which halved at the end of 2014.
This meant that, despite increased carryings, bunker costs were reduced in total by around 11 per cent.
The company said that the deployment of more efficient ships and "optimisations in operational flows" also contributed to this.
Plans for 2015 include increasing fleet size and developing new routes, as more substantial growth is targeted for 2015.
Hamburg Sud expanded its fleet last year through additional ships in the "San" class with a capacity of 9,600 TEU each, bringing the number of ships with a slot capacity of at least 9,000 TEU up to 13.
The company's Brazilian subsidiary Alliance also introduced two 4,800-TEU wide-beam ships in its sabotage fleet.
Meanwhile, five older and smaller ships were sold, and the container pool was increased to 468,000 units. Total capacity in liner services rose to 537,000 TEU and the average ship capacity rose from 4,437 TEU to 4,795 TEU.
The company plans to further expand its fleet this year with three Cap San new builds, scheduled for delivery later in the year.
The company will also target further integration through developing new routes, carrying on the precedent set from the company's takeover of the liner services of Compania Chilena de Navigacion Interocea (CCNI).
Hamburg Sud will also be able to offer slot capacity at competitive rates after the company started working in collaboration with the Dubai-based United Arab Shipping Company (UASC).
Due to all this, the company is anticipating operating results for 2015 to be higher than last year, despite costs arising from the integration of CCNI.
Capital expenditure was 23 per cent lower in 2014 than 2013, at US$375.76 million, meanwhile the number of employees grew four per cent.
WORLD SHIPPING
27 April 2015 - 17:58
Hamburg Sud details disappointing year, outlines future east-west plans
GERMANY's Hamburg Sud, owned by German food dynasty Oetker, is putting volume growth in the major east-west trades at the top of its agenda this year, reports IHS Maritime 360.
WORLD SHIPPING
27 April 2015 - 17:58
Hamburg Sud details disappointing year, outlines future east-west plans
This news 9633 hits received.
These news may also interest you