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German container shipping leader Hapag-Lloyd delivered robust volume growth in the first half of 2025, navigating a complex landscape of market volatility, port congestion, and Red Sea security challenges. While achieving an 11% increase in transport volumes and advancing strategic partnerships like the Gemini Cooperation with Maersk, the company faced margin pressures from rising costs and geopolitical uncertainties.
The Hamburg-based carrier reported 6.7 million TEUs transported in H1 2025, up 11% from 6.1 million TEUs in H1 2024, driven by strong East-West trade routes. Group revenue rose 10% to $10.6 billion, supported by a steady average freight rate of $1,400 per TEU. However, profitability took a hit, with Group EBITDA falling 2% to $1.9 billion, Group EBIT declining to $0.7 billion, and net income dropping 3.1% to $829 million. Free cash flow improved to $700 million, reflecting operational strength amid challenges.
Trade Policy Shifts and Demand Swings
Global trade in 2025 has been unsettled by shifting policies and geopolitical tensions. New U.S. tariffs, including a steep 145% levy on Chinese goods introduced in April 2025, triggered a surge in cargo frontloading in Q2, boosting Hapag-Lloyd’s volumes. This temporary spike, however, masks a softer outlook for H2, as demand is expected to weaken and freight rates stabilize. The company adjusted its full-year guidance, lowering the upper end of its projections to reflect these uncertainties, forecasting Group EBITDA between $2.8 billion and $3.8 billion and Group EBIT between $0.25 billion and $1.25 billion.
Rolf Habben Jansen, CEO of Hapag-Lloyd, emphasized the impact of trade disruptions, stating, “Rapid shifts in trade policies have created unpredictable demand patterns, challenging the entire industry.” With global container volumes up 4.5% in H1 2025, the anticipated slowdown in H2 could further pressure freight rates, particularly on U.S.-bound routes.
Port Congestion and Rising Costs
Port congestion continues to strain operations, with rerouting around the Cape of Good Hope—prompted by Red Sea security risks—causing bottlenecks at major European and Asian terminals. These detours have increased transit times and added $180–$511 per FEU in costs, contributing to a 2% EBITDA decline. The higher operational expenses, combined with startup costs for the Gemini Cooperation, have squeezed margins.
The Gemini Cooperation with Maersk, launched in February 2025, has been a standout success, achieving over 90% schedule reliability compared to an industry average below 60%. This reliability has strengthened customer trust, though the alliance’s initial costs have tempered short-term financial gains.
Red Sea Disruptions Persist
Ongoing security risks in the Red Sea, driven by regional conflicts, have forced Hapag-Lloyd and Maersk to continue avoiding the Suez Canal, opting for longer routes around Africa. These reroutings have absorbed capacity and inflated costs, with projections indicating a 10% decline in freight rates for H2 2025 due to excess capacity and softening demand. While some carriers are cautiously testing Red Sea transits with military escorts, a full return to the route remains unlikely in the near term.
Strategic Moves for Resilience
Hapag-Lloyd is countering these challenges with targeted investments and cost-saving initiatives. The Gemini Cooperation has streamlined its network, while a cost-reduction program aims to save over $1 billion by 2026. The company also advanced its fleet modernization, completing the delivery of four 24,000 TEU dual-fuel vessels in H1 2025, bringing 38% of its fleet up to modern standards. These vessels support Hapag-Lloyd’s sustainability goals, including the use of green methanol.
In its Terminal & Infrastructure segment, the company reported EBITDA of $79 million and EBIT of $37 million. A majority stake in CNMP LH in Le Havre, France, acquired in March 2025, bolstered its European presence, while the opening of Hanseatic Global Terminals’ regional headquarters in Santiago, Chile, on August 1, 2025, expanded its global footprint.
Outlook for H2 2025
Hapag-Lloyd’s strong H1 performance, underpinned by volume growth and operational improvements, faces headwinds in H2 2025. Geopolitical uncertainties, trade policy shifts, and persistent congestion will test the company’s adaptability. With an industry-wide profit decline projected at $11.6 billion for 2025, Hapag-Lloyd’s focus on cost control, network reliability, and terminal investments will be crucial to maintaining its position in a volatile market.
