The chairman of Hapag-Lloyd has suggested in an interview published in the German newspaper Hamburger Abendblatt that his company’s merger talks with the Chilean container shipping
company CSAV could be a reminder and incentive for the owners Hamburg Süd — the Oetker family — to restart merger talks with Hapag-Lloyd at some point.
Brief English excerpts from the interview were included in a story published by Reuters.
“The three of us together would be stronger,” Juergen Weber is quoted as saying.
This month Hapag-Lloyd said it was in merger discussions with CSAV. Earlier this year, Hapag-Lloyd broke off merger discussions with Hamburg-Süd. Both of the German companies are based in Hamburg and have held periodic discussions about a business combination for years.
Like CSAV, Hamburg-Süd is a powerhouse in trades to and from South America, and the two carriers share space on many services.
In his wide-ranging interview with Hamburger Abendblatt, Weber, former chief executive officer of Lufthansa, said shipping may go through a round of concentration as has the airline industry.
Some of Weber’s comments echoed remarks by Michael Behrendt, Hapag-Lloyd’s chief executive officer, in an interview published earlier this month, before the CSAV talks were announced, with Deutsche Verkehrs Zeitung (DVZ), a leading German logistics newspaper.
Behrendt said Hapag-Lloyd was “fundamentally interested in growth, and that includes external growth.”
Asked about the possibility of a merger with Hamburg-Süd occurring, he said “You would have to ask other people that question. All I can say is that the most obvious, the simplest and the most sensible solution from a business perspective is 150 meters from here as the crow flies.” The headquarters of the two German shipping companies are a few blocks apart.
Behrendt described the current behavior of the shipping industry as “ludicrous. We are currently operating with a capacity utilization of 90 percent or more. Every other transport segment would be delighted with this level of utilization. Elsewhere, they are more than satisfied with 80 percent. And when it gets to 90 percent, it’s like the land of milk and honey. This is normal. But in the world of shipping, the vessel is not thought to be full until the very last sack of coffee has been loaded in the captain’s cabin. The belief that a ship has to be full at all times is this industry’s sickness.”
He said Hapag-Lloyd would “have no problem with the ships operating at 80 percent capacity with appropriate freight rates.”
“The customers laugh their heads off at the way we do business in this industry,” he told DVZ. “We introduce rate increases, but still end up below the level before the increase. It’s ridiculous.”
In the latest issue of its Container Insight Weekly, Drewry Maritime Research, wrote “Hapag-Lloyd and CSAV have much to gain by joining forces operationally, but finding a satisfactory financial deal will be a lot harder.”
The London-based firm said the two companies have little service duplication and “Hapag-Lloyd’s mighty east-west schedules could be dovetailed into CSAV’s north-south services to set up a much improved global network.”
Could Hapag-Lloyd-CSAV deal revive Hamburg-Süd talks?
