Major carriers including Hapag-Lloyd, Maersk, and Zim are slashing costs as freight rates continue to decline across global trade lanes. Executives warn that expenses such as shipbuilding, chartering, fuel, and port labor have risen sharply since the pandemic, pushing unit costs well above 2019 levels.
Zim highlighted higher fuel costs, port congestion, and increased dockworker wages, noting that more ships are now required to maintain schedules. Hapag-Lloyd and Maersk emphasized that costs from low-sulfur fuel, EU emissions regulations, and inflation cannot be rolled back, even with efficiency programs.
Carriers expect third-quarter earnings to hold steady but anticipate declines in Q4, prompting aggressive cost-saving plans. Hapag-Lloyd launched a $1 billion program targeting double-digit unit cost reductions by 2026, while Maersk aims to cut fuel use and improve asset efficiency through its Gemini Cooperation alliance.
Meanwhile, demand growth is slowing. J.P. Morgan projects flat or negative trade volumes by late 2025, alongside a surge in vessel deliveries—adding nearly 9.3 million TEUs of capacity, or 29% of the global fleet. Spot rates have already plunged: Asia–US West Coast rates are down two-thirds since January, while Asia–Europe and trans-Atlantic rates are at loss-making levels.
Despite excess capacity, Hapag-Lloyd insists rates will not return to pre-pandemic lows due to structural cost increases. Still, with rising supply and weakening demand, analysts expect accelerating rate erosion and mounting industry losses through 2026.
Source: joc.com