“Our Industry Will Remain Extremely Volatile”

Interviewer: The steadily growing sizes of container ships represents an enormous infrastructural challenge for ports. How do you rate these developments?

Rolf Habben Jansen: We don’t believe that larger ship sizes make sense from an economic point of view. The corresponding unit cost advantages are significantly reduced as ship sizes increase.

With the acquisition of the UASC, Hapag Lloyd now owns a container ship type with a capacity of around 20,000 TEU. Has this ship size proven to be successful?

Our six 20,000 TEU ships have proven to be highly successful in transports from the Far East to Europe, and we are very satisfied with their performance. Thanks to the merger with UASC, as of 2017, we have access to a total of 17 ship sizes with 15,000 TEU and over. In the short term, we see no need for further orders of such ultra-large container vessels.

Maritime transport has been faced with a challenging market situation for a while now. The industry has been reacting with a wave of mergers and alliances in an attempt to regain stability. What is your personal assessment: Do you think that this phase is over for now?

We don’t expect that there will be any mergers among the big players in our industry in the near future. Not least because such alliances are unlikely to receive the approval of worldwide competition authorities – or otherwise, may be subject to considerable restrictions.

The HLAG has not been inactive in this regard in the past few years – from today’s perspective, would you say the integration of CSAV and UASC is completed?

Yes, the integrations are completed and we have been able to achieve the expected synergies.

Digitalization provides unimagined opportunities and permeates a growing number of business sectors, including the transport industry. How would you evaluate these developments, and what strategy is Hapag Lloyd pursuing in this field? Would you say your company is ‘on course’ in the implementation of digital technologies?

Of course, digitalization plays a decisive role in our industry, and yet, we are unfortunately lagging behind other industries. Our company is on a very good track and we are intensively working on a range of digitalization projects. For example, we have recently implemented ‘Quick Quotes’. With this new tool, customers from all around the world can significantly simplify and accelerate their quotation process. They can receive online quotes for container shipments within seconds – along with transparency and detailed information about the pricing structure. Thanks to this new tool, the quotation process for worldwide container shipments is now faster, simpler and more comfortable for our customers.

Global economy has once again seen a positive turnaround, but some observers say that this upswing rests on a shaky foundation since it was bought with low interest debt. Do you see the potential threat of another economic crisis? If so, would you be prepared for excess capacities and loss of business in order to fend off possible negative consequences?

Our industry has always been and will remain extremely volatile. At the moment, there are no indicators for a worldwide economic crisis. At most, we can envision potential restrictions due to regional or multi-lateral trade barriers or further increases in bunker prices. We believe that we are well equipped to react flexibly for any such challenges.

As the world’s leading export nation, China is massively investing in the New Silk Road project. Especially with the expansion of the Trans-Asian railway routes, China wants to offer an alternative to container ships. How do you view this challenge?

These rail connections provide interesting alternatives for some customers, as they reduce transit times from China to Europa to around 15 days. It shouldn’t be forgotten, however, that the costs per container are about 50% higher than in seafreight – and that the average freight train can only transport about 40 containers. Our larger ships can carry approximately 20,000 containers. I don’t mean to trivialize our competition on the rails – but we are talking about David on the one hand and Goliath on the other.

The HLAG owns approximately 25 percent of the HHLA Container Terminal Altenwerder (CTA). How important is the much disputed deepening of the Elbe river for a long-established, traditional Hamburg-based company?

Both the widening and the deepening of the river are of great importance. If Hamburg is to continue playing an important role in the competition of European ports, there is no alternative. Luckily, all legal obstacles have now been removed and the corresponding measures will begin shortly.

International seafreight will have to make significant changes as of January 1, 2020 due to stricter environmental regulations by the International Maritime Organization: The global limit for the sulphur content of ships’ fuel will be lowered. How is Hapag Lloyd prepared for this environmental protection measure, and are you considering LNG (liquefied natural gas) as a permanent alternative?

Hapag-Lloyd welcomes the IMO2020 emission norm. It is an important step on the way to reducing the emissions of worldwide shipping and thus doing good for the environment and for people’s health. At the same time, we expect additional costs of around one billion US dollar for Hapag Lloyd in the first few years. We will not be able to bear these costs alone and will have to pass them on to customers. We’re starting a pilot project in 2019 where we will convert one of our large ships to LNG. Depending on the results of this project, we will discuss further conversions.

cargo-partner has been active in sea freight for 35 years and considers Hapag Lloyd a ‘Core Carrier’, making use of a variety of its services. How does the cooperation with a mid-sized freight forwarder like us differ from cooperation with the so-called ‘Big Players’ in the industry?

A customer is a customer. No matter whether big or small. Of course, customer care for a multinational client with over 100,000 TEU per year is significantly more complex and elaborate than for a medium-sized company. On the whole, however, there should be no noticeable difference in customer care and service quality.

You are a big fan of ice hockey and are also interested in football. What NHL teams do you think have a chance of winning the Stanley Cup this season? Recently, the HSV and the FC St. Pauli met for a local derby which ended 0-0. As a ‘neo-Hamburger’, who will you be rooting for in the return match?

I’m placing my bet on the Nashville Predators because I think they have a real chance. In football, I’m a declared HSV fan – in this case, my allegiance is clear. However, I do wish for both teams to rise to the First National League.

In closing: In a current interview which focused on sports among other topics, you mentioned: “Everyone can make mistakes, but it annoys me when players make the same mistakes over and over again.” Which mistake would Hapag Lloyd never repeat under your command?

I find that talking about mistakes from the past is pointless – that’s water under the bridge. I would generally like to encourage our employees to adopt an entrepreneurial point of view and make courageous decisions. Mistakes can happen – the important thing is to learn from them. The only way to make no mistakes is to make no decisions.

Thank you for the interview and best of success with your upcoming projects.