German container shipping giant Hapag-Lloyd is absorbing an additional $40 million to $50 million in costs every week as a result of the ongoing Iran conflict, according to Ship & Bunker. The surge is being driven by elevated bunker fuel prices, rising insurance premiums, and mounting container storage expenses.
CEO Speaks Out on Earnings Call
Speaking during an earnings call on March 26, Hapag-Lloyd CEO Rolf Habben Jansen described the financial pressure in stark terms. “Costs are increasing sharply,” he said, adding: “If we look at the impact that this has on us, then we talk easily about $40 million or $50 million per week that we are facing at this point in time.”
Ship & Bunker reports that Jansen identified higher bunker costs as the primary driver of the increase, with insurance and container storage expenses adding further financial strain on the carrier’s operations.
Surcharges Introduced to Offset Rising Expenses
To help recover these additional costs, Hapag-Lloyd has introduced contingency and emergency charges. However, Jansen noted that cost recovery typically comes with a lag, meaning the carrier’s financials may continue to feel the pressure in the short term.
Rerouting Away from Hormuz and the Red Sea
Ship & Bunker also reports that Hapag-Lloyd continues to reroute its vessels away from both the Strait of Hormuz and the Red Sea. While the carrier had been moving closer to resuming Red Sea transits, it has held back due to the conflict’s continued escalation. Jansen warned that if the situation persists, it would not be positive for global trade.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
