Hapag-Lloyd chief executive Rolf Habben Jansen is not planning to downgrade the size of containerships that his company is seeking to order.

But the head of the German liner operator sees no logic in pushing ahead with a newbuilding order for large containerships in the current climate.

"We are still looking at the newbuilding programme, but we do not intend to put an order out somewhere in the next few weeks," Habben Jansen said in a virtual press conference today.

"That means realistically there will be a delay of a few months."

TradeWinds reported last week that Hapag-Lloyd had stopped work on its tender to build six 23,000-teu vessels for delivery from mid-2022, amid reports that it may look to order smaller ships.

But Habben Jansen told journalists there were no plans to downgrade the order to smaller vessels to cope with lower container volumes.

He added that a mixture of containership sizes will be needed when the market recovers.

"I do not think — as has been speculated — that after this crisis we will no longer need big ships. I think you will always need some big ships and we will also need some big ship going forward," the executive said.

"But we don't only need big ships, because for certain trades you can just be more flexible and therefore more suited for smaller ships."

Quarterly results

Hapag-Lloyd will release quarterly figures next week on 15 May.

These are expected to show the early impact of the coronavirus on the liner operators container business.

Habben Jansen said he did not expect a recovery until the third quarter of the year. Until then, the liner operator is seeking to cut costs to cope with the shortfall in cargoes.

Those cost savings could add up to a "three-digit million dollar number" for the entire year, he said.

Some savings have been accrued by restructuring services including by rerouting vessels around the Cape of Good Hope to avoiding hefty Suez Canal fees.

Hapag-Lloyd has implemented capacity reductions in line with the industry average of around 15% to 20% in the second quarter of the year.

“Whether there will be more capacity in June and July would depend on how demand develops," he said.

A different crisis

Clarksons forecasts of a 10% fall in container trade in 2020, which is greater than the downturn that hit the market during the 2008/9 financial crisis.

But Habben Jansen said that the current crisis is different from that of a decade ago when the orderbook comprised half of the global fleet.

“Today that situation is materially different and the orderbook is a record low," he said.

"I would also be very surprised if we were to see orders coming in any time soon, so one would expect that orderbook to come down even further."

Hapag-Lloyd has so far redelivered very few chartered ships to their owners, although the number could rise to reach "a small double digit number".

But Habben Jansen was unsure whether the crisis would generate further bankruptcies in the liner shipping sector.

“The industry will be under pressure for the next couple of quarters, and depending on how strong you are positioned you might face more or less issues," he said.

He said that Hapag-Lloyd has secured additional liquidity via access to additional credit lines.

Those credit facilities are not yet needed, but are "more precautionary in case the crisis lasts longer".

"Our balance sheet is anyway quite healthy, we’re well positioned to weather the storm," he said.