Click the photo if you want to read more about Hapag-Lloyd's strategy in the Journal of Commerce.
Hapag-Lloyd isn’t about to start making serious money again or paying a dividend to its shareholders. But there are signs the carrier is better placed than many of its rivals to take advantage of the container shipping recovery. Hapag-Lloyd has trimmed its headcount, reduced its payroll, frozen recruitment, streamlined its regional offices and restructured liner services as part of a plan to cut $1 billion in costs annually. It also has cajoled shipowners, many of them German, to reduce ship charter rates — a major cost item because 58 of its 117 vessels are hired, accounting for more than 45 percent of its total fleet capacity. And unlike many of its rivals, Hapag-Lloyd isn’t weighed down by a huge order book of giant ships. It has just 11 vessels on order, equal to 19.6 percent of its current capacity. France’s financially troubled CMA CGM, by contrast, has an orderbook equivalent to 47.5 percent of its current capacity and is spending valuable management time struggling to cancel a third of its contracts with South Korean shipyards.