Hapag-Lloyd Q4 2022 EBITDA over 7 times higher than Q4 2019 EBITDA

Spot container shipping rates in many trades have already collapsed back to pre-COVID levels. But container liner earnings are still nowhere near where they were pre-pandemic. Ocean carriers are still earning billions more per quarter than they used to.

German carrier Hapag-Lloyd reported earnings before interest, taxes, depreciation and amortization of $3.8 billion for the fourth quarter of 2022. That’s over seven times EBITDA in Q4 2019, pre-COVID.

The Bloomberg consensus forecast is for Hapag-Lloyd to post EBITDA of $5.6 billion for full-year 2023, 2.5 times EBITDA in 2019. Deutsche Bank thinks Hapag-Lloyd’s EBITDA will be $7.7 billion, 3.5 times 2019 earnings.

Fall in spot rates comes first

Spot index data over the past decade shows just how extreme of an anomaly the COVID era actually was. Global spot rates averaged around $2,000 per forty-foot equivalent unit in 2012-14. They fell to around $1,300 per FEU in 2015-16 amid the Hanjin bankruptcy. They averaged around $1,450 per FEU in 2017-19.

The pandemic era’s goods-buying spree propelled the global spot average to an unprecedented peak of over $10,000 per FEU in late 2021. Global averages of the Drewry World Container Index (WCI) and Freightos Baltic Daily Index (FBX) are now back to around $2,000 per FEU.

Most of the east-west spot rate indexes have now normalized. (The still-booming trans-Atlantic westbound trade from Europe to the U.S. is an exception.). The pace of descent flattened in December and January across most global trades. The cliff-like rate plunge seen in August-October has ended.

Trans-Atlantic strength is still keeping the global averages higher than in 2017-19, while in other lanes, including Asia-West Coast, spot rates are all the way back to pre-pandemic levels.

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