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Hapag sees $270m rise in bunker costs

Fuel consumption up 2.1% due to rise in ship capacity and longer waiting times.

Image credit: Hapag-Lloyd

Updated on 10 Mar 2022 16:35 GMT

Hapag-Lloyd reports that bunker consumption rose by 86,375 tonnes, or 2.1 percent, to 4.195m tonnes in 2021.

The increase was said to have been caused by a rise in ship capacity compared to the previous calendar year as well as longer waiting times at and outside of ports.

In a breakdown of fuel use, the box shipper said its vessels burnt 349,278 tonnes of high-sulphur marine fuel oil (MFO) between January and December, which was a year-on-year (YoY) increase of 101,345 tonnes, or 40.9 percent.

Consumption of low-sulphur MFO and distillates dipped YoY by 17,521 tonnes, or 0.45 percent, to 3.843m tonnes, whilst the consumption of 2,551 tonnes of LNG in 2021 represented the first year that Hapag's ships consumed the fuel.

It means that low-sulphur MFO, distillates and LNG made up 91.7 percent of total fuel consumption in 2021, with 8.3 percent allocated towards high-sulphur products.

For the purpose of comparison, during 2020, low-sulphur fuels made up 94 percent of overall bunker use.

Bunker consumption per TEU remained constant compared to the previous year at 0.35 tonnes. Since 2009, Hapag notes that the figure has been cut by approximately 42 percent.

In 2021, 18,500 tonnes of biofuel were bunkered in Rotterdam by Hapag. The company began testing the use of biofuels based on fatty acid methyl ester (FAME) back in 2020. These are produced from organic waste such as used cooking oil and mixed with conventional bunker fuel.

Bunker costs and prices

The average bunker price paid by Hapag's fleet rose YoY by $96, or 25.3 percent, to $475 per tonne in 2021, compared with $379 per tonne the previous year. This increase, together with higher container handling expenses — caused by disruptions to supply chains — had a negative impact on operating costs; however, it was not enough to prevent a significant improvement in the operating result, which was primarily due to a sharp increase in freight rates as transport volume remained constant.

Overall, Hapag's bunker expenses jumped $270.9m, or 19.2 percent, to $1,678.2m, up from $1,407.3m in 2020.

Financial results

In its financial results for 2021, Hapag posted a group profit of $9,085m, compared with $935m the previous year.

Revenue skyrocketed $9,502m, or 74.4 percent, to $22,274m as the average freight rate went from $1,115 per TEU in 2020 to $2,003 per TEU in 2021 — a rise of 79.6 percent.

Bunker price outlook

In its outlook for 2022, Hapag said it expects its average bunker consumption price to "clearly" increase.

"A significant and sustained increase in bunker prices above the expected development belongs to the top risks," the container ship operator said when referring to the situation in Ukraine.

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