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Hapag-Lloyd: Big dive in demand sent rates plummeting

The massive dive in demand, and to a lesser degree new ultra-large vessels, has sent container rates on Asia-Europe hurling toward rock-bottom, says Hapag-Lloyd CEO Rolf Habben Jansen. The carrier lost market shares in the first half of the year.

The current and extremely low spot rates on container routes between especially Asia and Europe, and to some extent on Asia-South America trades as well, are completely unsustainable for everyone in the industry. To imagine that these rates will remain at this level is highly unrealistic, says Hapag-Lloyd CEO Rolf Habben Jansen.

"On the routes between Asia and Europe in particular we have experienced a very unusual combination. On the one hand, a high number of new ships have been deployed this year, which was expected. But the main reason that we find ourselves in such severe difficulties on Asia-Europe is the weak demand. In early 2015 everyone expected a growth in demand of around five percent, but in reality demand has dropped 3-4 percent, and this is a colossal difference on a route where several hundred thousands containers are shipped every week," explained Rolf Habben Jansen at an investors' conference following publication of the carrier's half-year result.

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