The low rates in the container market hit German container giant Hapag-Lloyd hard in the first six months of the year.

"The first-half result is disappointing," says CEO Rolf Habben Jansen in a comment on the result.

The disappointing fact is a net deficit of EUR 142.1 million for the first half of 2016, which represents a significant setback from the first half of 2015, when the carrier's net result came to a profit of EUR 157.22 million.

Find the complete Hapag-Lloyd second quarter interim report here

"Our cost saving measures and efficiency programs are on track and the synergies from the merger with CSAV are being realized on schedule. But this isn't enough to completely compensate for the significant drop in the average freight rate. Even though freight rates have finally gone back up towards the peak season in various trades this rebound is coming later than anticipated and more is needed going forward," says Habben Jansen.

Hapag-Lloyd's transported volumes in the first half of the year came to 3.7 million teu, just 0.4 percent less than in the first half of 2015. Cargo volumes, however, declined almost 20 percent, which means that the carrier's revenue in the firsts six months of 2016 finished at EUR 3.8 million against EUR 4.7 million in the same period last year.

UASC to be integrated as quickly as possible

Following the 2015 merger with Chilean carrier CSAV, Hapag-Lloyd's fleet consists of a total 175 container vessels for a combined capacity of 955,000 teu. Hapag-Lloyd announced a new merger in July this year - this time with United Arab Shipping Company, UASC, in a move that will further expand the German carrier's fleet.

The integration of UASC will be one of Hapag-Lloyd's two top priorities for the remainder of 2016 and next year, says CEO Habben Jansen.

"In the second half of the year, our main focus will be to further improve our cost base and to do whatever we can to get freight rates back to a more sustainable level," Habben Jansen added. "In this difficult competitive environment, it is very important to complete the transaction with UASC as quickly as possible and to start the integration of UASC immediately after the completion of all pre-closing conditions. The integration will bring us annual net synergies of at least USD 400 million, some of which should already take effect next year," he says in the interim report.

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