There are two main reasons for this. On the one hand, the demand for container transport has exceeded our original expectations for 2024, mainly due to very strong demand in the United States. On the other hand, the tense security situation in the Red Sea, and the longer detour route on the Europe-Asia trade around the Cape of Good Hope, have absorbed more transport capacity, which has tightened supply. This situation has positively impacted spot rates and also our average freight rates. In summary, strong volume growth and freight rate development have led to better results this year than expected.

We experienced a peak in the third quarter, around July. We initially expected – and this was also observable at first – that freight rates would weaken. But we now see a certain resilience, as demand remains stable. Currently, it is expected that we will achieve an average freight rate of around 1,500 dollars per standard container (TEU) for the entire year of 2024, which is roughly the same level as last year.

We currently assume that freight rates could fall in 2025. However, they are difficult to predict, due to market uncertainties and geopolitical events.

How protectionist the US will actually be, and what tariffs might be imposed, remains to be seen. Trade wars are not positive for anyone. The fact that there are strong centrifugal forces within trade blocs today cannot be denied. We are convinced that a functioning global trade system is necessary for further sustainable development, to ensure that all regions worldwide benefit from growth and prosperity. But Hapag-Lloyd has a global and very balanced network, and is well positioned to adapt to changes in trade flows.

Protectionist measures lead to changes in trade flows, but not necessarily to an immediate reduction in volumes overall. We expect stable, perhaps slightly increasing demand in 2025 due to these changes, as uncertainty can also lead customers to stockpile more.

We must assume today that a solution, especially a short-term one, is not imminent. Whether the security situation in the Red Sea will alter as a result of the change in government in the US is currently unclear. Therefore, the baseline scenario is that the security situation will remain tense. In the medium term, we would expect the route through the Suez Canal to be safe again, which could lead to more available transport capacity, and increased pressure on freight rates.

Yes.

We currently require about 10% more capacity. We have some flexibility, so we can deploy capacity. Additional capacity is also needed in the industry because ships are sailing slower to meet higher regulatory requirements regarding efficiency, and to reach their own greenhouse gas emission reduction targets.

In October, we decided together with our partner that we will sail around the Cape of Good Hope in the Gemini network. The safety of our seafarers has the highest priority. The additional travel distance will not impact punctuality because we have adjusted our schedules accordingly. Our customers are aware that certain voyages will take longer. Within this framework, we will also improve our schedule reliability.

The still relatively low schedule reliability is currently a characteristic of our industry. It affects all carriers. The cooperation with Maersk is based on a new network strategy that will significantly improve schedule reliability. The so-called hub-and-spoke strategy involves fewer port calls and intermediate stops on the mainliner services, making the main route more reliable and connecting it with the flexibility of an extensive shuttle network. This is a key lever to bring schedule reliability up to the targeted level of around 90%.

That is our goal. I would describe it as ambitiously realistic.

Price competition in our industry has been, is, and will remain, intense. Additionally, the years of high inflation have put strong pressure on the cost side. Our unit costs are currently around 1,300 dollars per TEU. The current cost level is nearly 30% higher than before the Covid pandemic. We have implemented cost-saving measures that have brought relief. However, the pressure to control costs remains significant.

Container shipping is a very cyclical industry. When transport demand stabilises and additional capacity enters the market, pressure increases. We expect the competition to intensify in 2025, and quality service will become even more important.

The current situation in our industry is different from around 15 years ago. On the one hand, the number of providers has significantly decreased, due to industry consolidation over the past decade. On the other hand, customers realised during the Covid pandemic how important stable supply chains are. We have backed up long-term customer relationships through contracts that secure capacity on our ships, but also enable freight rates that at least cover costs. These developments are observable across the industry, so I expect that price competition as severe as in the years following the financial crisis will not be repeated. As an industry, we cannot afford to be in a situation where we fail to earn our capital costs for years. We must generate sufficient returns in a stable ways.

It is true that we were under pressure regarding capital costs after the difficult fourth quarter of 2023 and the weak start to this year. But in the full year of 2024, we expect to more than cover our capital costs.

It is still too early to give a forecast on that. We will present our outlook for 2025 in March.

Currently, the order book in the industry is about 26% of the entire global fleet. So the order book is not too large. Older, economically inefficient ships are being replaced or scrapped. I expect the scrapping rate to increase in the coming years. It is likely that we have already seen a peak in the delivery of new ships this year, with around 3.2 million TEU of additional capacity. Analysts expect that in 2025, about 1.9 million TEU will be delivered, which is 40% less new capacity entering the market. It is likely that by the end of the decade, around 2027, we will see a recovery in new capacity in the industry.

In recent years, we have been relatively cautious with new ship orders compared to the industry. The current orders aim to provide adequate capacity for the network in the Gemini cooperation with Maersk, starting in February 2025. Furthermore, we want to modernise our fleet with the goal of reducing CO2 emissions by 30% by 2030 compared to 2020, and achieving climate neutrality by 2045. These new orders will expand our services and underpin our growth ambitions in our 2030 strategy. Older, inefficient ships that have reached an average age of 25 years at the end of their lifespan will be replaced.

No, in recent years, the scrapping rate across the industry has been lower. This was also due to the high transport demand during the Covid pandemic. So, there is some catch-up needed here. The new ships will significantly improve the efficiency of our fleet operations, reduce costs, and enhance our competitiveness.

The financing consists of four components. A part of the purchase price will be financed with our own funds. Another part consists of commercial loans, a further part from leasing contracts, and a syndicated credit facility, which is backed by a Chinese export credit agency (ECA). The loan-to-value ratio is about 80%, and the maturities range from 12 to 18 years.

Our business model differs from Maersk’s logistics integrator strategy. At the moment, we have no plans to reduce staff. As part of our 2030 strategy, we are focusing heavily on efficiency and productivity within the company. This is a continuous programme that involves optimising, automating, and digitizing processes. We are committed to deploying our employees in the right areas, and further developing their skills for future requirements. We are investing in employees and their training. To this end, we also founded the Hapag-Lloyd Academy.

Even after paying dividends and making investments, we will have a very strong balance sheet and a solid liquidity base in 2024. We are in a very good position. As part of our new strategy, we aim to invest about 20 billion to 25 billion dollars in organic growth, our fleet, our employees, and our systems and IT landscape by 2030. This plan is also supported by our major shareholders. The measures must, of course, pay off. We expect them to have a positive incremental effect of around 2 billion dollars on our operating result (EBIT) by 2030. Regarding our dividend policy, we continue to aim to pay at least 30% of the group’s annual net income to our shareholders.

We are pleased with the extension of the shareholder agreement. It underscores the commitment of the largest shareholders to Hapag-Lloyd. The cooperation will remain constructive. I cannot comment on any other matters.

At the moment, there are no plans for acquiring other carriers. The focus is on implementing our organic growth.

Our strategy includes expanding our portfolio to about 30 terminals by 2030. The terminal portfolio should support our core business of container transport and secure the liner network. We will focus even more on majority stakes going forward.

There are no other considerations. We are the largest customer of the Port of Hamburg and are very satisfied with this investment.