Hapag-Lloyd tops margins chart as operating losses return

According to an Alphaliner analysis of container line results, two of the major lines reported an operating loss in their Q1 releases.

ZIM posted a $14m operating loss on $1.37bn of revenue, its first operating loss in almost five years, said Alphaliner. ZIM’s 1% negative margin compared to a 13.1% negative margin for Wan Hai, which lost $109m in the quarter.

At the top of the table, Hapag-Lloyd reported a 31.1% margin on its revenue, but the figure demonstrated the change of fortunes across the board – the best performer in Q1 2023 was below the 33.3% average operating margin in the prior month.

Average operating margins in Q1 were 13.1%, the fourth consecutive quarterly decline as the market cooled from its pandemic overheating.

“Despite the decline, results have not yet returned to ‘normal’ for the main carriers, who have historically posted margins in the +/- 5% range. Indeed, only one quarter in the twelve years prior to the pandemic exceeded the latest operating margin of 13%, and historically results remain robust for certain carriers,” said Alphaliner.

Container lines are currently under pressure from all angles, with rising operating costs, lower demand and liftings, and falling freight rates across spot and contract markets.

“The advantage of high contract cover is expected to wane over the year as new contracts are signed at lower prices,” said Alphaliner, noting Maersk’s assertion Q1 would be its strongest quarter this year, despite its $5.1bn loss in revenue compared to Q1 2022.

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