The Port of Los Angeles is suddenly growing again, with year-on-year growth of container volumes up by an extraordinary 60% in February. But not all ports are as buoyant. The port of Hamburg for example. Hamburger Hafen und Logistik AG (HHLA), which is the dominant container terminal manager at Hamburg, has just announced that it saw container volumes fall 6.3% year-on-year to 5.687m TEU over the period of the Financial Year 2023. Counting HHLA’s other, smaller terminals that include Odessa in the Ukraine, container through-put volumes declined by 7.5% to 5.9m TEU.
HHLA said that “the main driver of this development was the decline in volumes for the Far East shipping region – China in particular”, where as North American and Middle Eastern traffic partially offset this decline. However, feeder traffic from Sweden and Poland were “strongly down” whilst Russian trades “were also absent due to the sanctions”.
HHLA also has a significant business handling rail and road freight out of Hamburg and around Northern Germany. This intermodal traffic saw a fall of 5.4% when measured in TEU, with a particularly heavy fall in road freight. However, revenue from this business increased by 4.2% as the costs of transport in Germany remained high, although this was not reflected in profits with Earnings Before Interest and Tax (EBIT) down by 23.6% at €72.9m.
Overall, the whole company which describes itself as the ‘HHLA Port Logistics subgroup’, listed on the Frankfurt stock exchange and now largely owned by MSC, saw revenue fall by 8.6% to €1.4bn. EBIT fell by 53.9% at €92.9m which represented a halving of both profits and profit margins. ‘Profit after Tax’ fell by 89.4% to €8.7m.
A considerable reason of the fall in profits and revenues at HHLA has been the return to normality in the market for port services. Areas such as container storage within the port are much less lucrative than they were in 2021 and 2022. However, HHLA has also had to face a general downturn in the economies that it serves. German trade has been badly hit by a number of forces, whilst the effects of the war in the Ukraine have depressed Baltic traffic. HHLA faces long-term challenges to its business model as its ‘home’ region undergoes profound economic change.
Author: Thomas Cullen
Source: Ti Insight
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