German shipping company Hapag-Lloyd is to cut costs to combat runaway price increases in bunker fuels that caused it to slash full year earnings forecasts last month, its chief executive told shareholders on Tuesday.
“Major cost positions have risen more than initially expected and are pressuring operating margins,” CEO Rolf Habben Jansen said in Hamburg.
“We are responding short-term to this development through forceful cost management and will keep Hapag-Lloyd competitive this way,” he added.
Among the measures taken were accepting more valuable cargo, lowering terminal contract costs and studying closely individual ship systems, with a view to terminating them if they proved to be economically inefficient, he said.
Hapag-Lloyd in late June slashed its full-year profit forecast, saying freight rates had recovered more slowly than expected while fuel and charter costs had ballooned.