Hapag-Lloyd: China-to-US Volumes Surge 50% Since Tariff Rollback

Yahoo

14-05-2025

Hapag-Lloyd is seeing a surge in container volumes on the China-to-U.S. trade lane after the countries agreed to lower their respective tariffs for 90 days.
Bookings from China to the U.S. shot up 50 percent compared to the week prior, according to Rolf Habben Jansen, CEO of Hapag-Lloyd, in an earnings call Wednesday morning.
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Additionally, import bookings are up 'in double-digit percentages' compared to the pre-tariff period, he said.
While Hapag-Lloyd doesn't expect the 50 percent increase to hold up, Habben Jansen said he expects to see 'a little bit of a surge' in volume over the next 60 to 90 days. Beyond that period, it would be difficult for the ocean carrier to predict volumes, which will be dependent on trade agreements the U.S. makes with China and other countries.
The volume increases represent a clear reversal from before the tariff rollback, when Hapag-Lloyd saw 'bookings being down on average around 20 percent, with peaks up to 30 percent,' in recent weeks. Some of that dip was compensated elsewhere by additional volume from Southeast Asia, Habben Jansen said.
With the swift return of cargo to the trans-Pacific trade lane, Hapag-Lloyd's Gemini Cooperation with Maersk is going back on its original vessel swapping plans to further align with the capacity on the route.
'We deployed some smaller ships on the trans-Pacific instead of doing blanks in order to continue to offer those weekly sailings. Now we will reverse that, and that means that we will, as of next week or the week after next, go and deploy bigger ships again in the positions where we have put smaller ones in over the last couple of weeks,' Habben Jansen said. 'I expect that people that have put blanks into their schedules, as the quarter progresses, will continue to put ships and services back in.'
Blank sailings had been the calling card for many carriers in the wake of the 145-percent tariffs on imported Chinese goods, but Hapag-Lloyd and Maersk opted not to take that approach.
In the wake of the change in volume, Habben Jansen said he doesn't expect congestion to overwhelm the ports, but remained wary about them accepting too many extra ships in the coming weeks.
Like other industry experts, the CEO expects at least a brief increase in ocean spot freight rates on the elevated U.S. imports.
'More than half of the cargo we have is contracted cargo, so we will continue to move that as per contract. But of course, there are also spots that have not yet been booked because they move on short term rates,' Habben Jansen said. If, as we see right now, demand is significantly stronger than or more than supply, then it would not be illogical if short-term rates go up.'
Amid the about-face in the trans-Pacific, the container shipping giant affirmed its full-year guidance, with company stock increasing 12 percent Wednesday. The outlook calls for total earnings before interest and taxes (EBIT) to be in the range of $0 to $1.5 billion.
The tariffs and the Red Sea crisis are two of the main factors that continue to subject the earnings range to such a high level of uncertainty, according to the company.
Habben Jansen said the ocean carrier reassesses the Red Sea situation on a weekly basis, with the company judging whether the situation is safe for its workers—and whether it will remain that way for the foreseeable future—before making a return.
'We don't want to go in and out of the Red Sea all the time,' Habben Jansen said. 'We think there's going to be a transition phase of hopefully 60 to 90 days to gradually bring the ships back to their original routing. And that will generate some additional capacity.'
If the Suez Canal does end up opening, Habben Jansen estimates that there would be a mid-single-digit increase in capacity that would open up for the company's ships. This total could expand up to the high-single digits, he said, but higher levels of congestion in Northern Europe and the U.S. and fuel-conserving slow steaming is likely to take up added capacity.
Total revenue for the first quarter came in at $5.3 billion, up 15 percent year over year from $4.6 billion last year. Net profit at Hapag-Lloyd increased 45 percent to $469 million.
The company's liner shipping segment saw 9 percent volume growth to 3.3 million 20-foot equivalent units (TEUs), the highest quarterly year-over-year increase Hapag-Lloyd has had in several years.