Berlin (Reuters) - Germany's largest container shipping company Hapag-Lloyd felt the effects of the end of the coronavirus boom last year.

As the traditional Hamburg-based group announced on Tuesday, operating profit (EBIT) slumped to 2.5 billion euros based on preliminary figures for 2023. This is a seventh of what Hapag-Lloyd had earned in 2022. In the final quarter of 2023, the shipping company recorded a drop in EBIT of EUR 200 million, compared to a plus of EUR 3.3 billion a year earlier. According to the Group, the main reason for this is that freight rates, which shipping companies charge their customers for the transport of goods, fell as supply chains normalized in 2023.

According to Hapag-Lloyd, they fell by an average of almost 48 percent to 1,500 dollars per standard container. Turnover at the world's fifth-largest shipping company slumped by a good 48% to 17.9 billion euros, which is roughly the same extent. Freight rates in container shipping had risen sharply during the pandemic because transport capacities were scarce and supply chains had become fragile. This brought exceptional profits for the major shipping companies.

On Tuesday, Hapag-Lloyd reported roughly constant transport volumes of 11.9 million TEU for 2023 (2022: 11.8 million). At the end of the year, the conflict in the Red Sea had a negative impact, as the rerouting of ships around the Cape of Good Hope extended the voyage time, the company said.

Like other major shipping companies, Hapag-Lloyd has not sent any more ships through the Middle East since mid-December following attacks by Houthi rebels from Yemen on freighters in the Red Sea, instead diverting them around the southern tip of Africa. This leads to delays, higher costs and fees. The usual route via the Red Sea, the Suez Canal and the Mediterranean is the shortest shipping route between Southeast Asia and Europe.

Just over a week ago, Hapag-Lloyd announced that it would be sticking to the detour until further notice. The development of the security situation will be continuously monitored. In the meantime, the EU is seeking a naval deployment to protect shipping in the Red Sea. Hapag-Lloyd offers its customers a transit service by truck across Saudi Arabia for particularly urgent and valuable goods.

The Hapag-Lloyd share fell by more than nine percent. The shipping company plans to present its final figures and an outlook for the current year on March 14.

(Report by Elke Ahlswede. Edited by Olaf Brenner. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)