With an EBIT of EUR 17.5 billion (USD 18.5 billion), the shipping line made a record profit in fiscal 2022. In addition to positive figures, CEO Rolf Habben Jansen also revealed plans to set up a subsidiary for port infrastructure and terminal operations. The executive indicated this during a meeting with media people last week in Hamburg.
Presumably this fall or latest in Q1, 2024, Hapag-Lloyd will knock at the door of its notary to sign the founding documents of a subsidiary whose task will be to bundle and manage all port logistics activities of the shipping line, Mr. Haben Jansen confirmed. The reason for the move is massive investments in port facilities and cargo terminals by Hapag-Lloyd to steer and control handling, storage, and related ground activities at ports frequently called at by the maritime fleet of the company, such as has been done in India already.
There, only days ago, the shipping group acquired 35% in J M Baxi Ports & Logistics Limited. This stake will grow to 40% following a planned capital increase. “The step will significantly boost our presence in India with a trusted local partner, and it is another important move to build up our terminal and infrastructure business,” stated the CEO.
According to him, J M Baxi is the largest private Indian terminal operator and a long-time partner of Hapag-Lloyd. The investment comprises container terminals, a multi-purpose terminal, inland container depots, container freight stations, and additional logistics activities such as rail service offerings across India. J M Baxi employs around 5,400 staff and handles a combined container volume of approximately 1.6 million TEU per year.
B(l)oom state India
As the world’s fastest growing economy, India has become a strategic growth market for Hapag-Lloyd. And the country is becoming increasingly interesting for international corporations as many of them are downsizing their China activities and relocating production to other locations, such as Mumbai, Hyderabad or Chennai, for instance. According to the International Monetary Fund, India’s economy is expected to increase by more than 6% annually in the coming years. India maintains diversified and balanced trade relations, and around two-thirds of the population is expected to belong to the middle class by 2030, which increasingly puts the country on the international map as an attractive consumer market. Forecasts published by the World Bank and the International Monetary Fund state that India has the potential to become the world's third-largest economy in the next five to ten years, after the USA and China.
Growing portfolio of port infrastructure
Yet, besides India, Hapag-Lloyd has also invested massively in port infrastructure elsewhere, most recently by acquiring the terminal business of Chile-based SM SAAM. That deal comprises ten terminals in six North, Central and South American countries, with roughly 4,000 staff and a combined container throughput of around 3.5 million TEU (2021). Furthermore, the shipping line holds stakes in the Italian Spinelli Group, the German JadeWeserPort, the Container Terminal Altenwerder in Hamburg, Terminal TC3 in Tangier, and Terminal 2 in Damietta, Egypt, which is currently being reconstructed.
Infrastructure investments are a different animal, clearly distinct from maneuvering vessels across the seven seas, Habben Jansen noted. Above a certain size, a separate management should bundle and steer the activities, he advocated. Though he did not say what the upcoming subsidiary would be called, one name that comes to mind is “Hapag-Lloyd - Terminal and Port Infrastructure Co.” Until a final decision is taken by the management, the naming issue is a matter of speculation.
We welcome and publish comments from all authenticated users.