The situation in the Strait of Hormuz is proving to be both costly and beneficial for container shipping. Partners in the Gemini Cooperation, Maersk and Hapag-Lloyd, are facing significantly higher operating costs but also experiencing stronger freight rates and increased demand.
On Thursday, Maersk raised its earnings forecasts for the year after a strong second quarter. Hapag-Lloyd also showed signs of recovery despite facing about $600 million in extra costs due to the conflict in the Middle East.
These results provide a unique look at how the disruptions in the Strait of Hormuz are affecting two carriers within the same network. Rerouting ships and cargo can be expensive, but the resulting congestion and limited capacity are helping to push up freight rates.
For Maersk, the overall outcome has been positive.
The Danish shipping company reported a revenue of $15.8 billion for the second quarter, a 20% increase from last year. EBITDA climbed to $3 billion, and EBIT nearly doubled to $1.6 billion. The ocean shipping division was the biggest contributor, adding an additional $2 billion in revenue compared to last year.
Due to disruptions, Maersk rerouted cargo meant for the Gulf through alternative ports and overland transport. The vessel capacity that was affected was quickly redirected to other growing markets.
At the same time, spot rates went up due to strong demand along with unbalanced trade flows and limited capacity, especially in Europe, the Middle East, South America, and West Africa.
During the quarter, Maersk saw a 4.1% increase in ocean volumes. Average loaded freight rates surged by 22%, and vessel utilization remained high at 96%. Ocean EBIT reached $935 million, compared to $229 million last year and a loss of $192 million in the first quarter.
The disruptions also aligned with Maersk's strategy to expand beyond traditional shipping.
The Logistics & Services segment saw a 15% year-on-year revenue increase, with Maersk highlighting landbridge solutions connecting various Gulf ports as a key growth area. Segment EBIT rose to $217 million from $175 million last year.
In contrast, Hapag-Lloyd has provided a clearer picture of the costs incurred due to the conflict.
The German carrier reported that the situation in the Middle East led to approximately $600 million in costs during the second quarter, which included higher expenses for fuel, insurance, storage, rerouting services, and inland transport.
Despite these challenges, Hapag-Lloyd noted that volumes and spot rates improved significantly from the first quarter due to strong exports from Asia and better demand in the U.S.
For the second quarter, Hapag-Lloyd reported EBITDA of $829 million, which was slightly above last year, while EBIT fell to $176 million from $189 million. Group profit declined from $306 million to $83 million.
In Liner Shipping, revenue rose to $5.7 billion as transport volumes increased to 3.5 million TEU from 3.4 million TEU. The average freight rate climbed 9% year-on-year to $1,475 per TEU. Liner EBITDA was $773 million, while EBIT decreased to $153 million from $167 million.
The additional $600 million impact from the Middle East conflict was more than three times Hapag-Lloyd's reported EBIT for the quarter, highlighting how costly the disruption has been, even as market conditions improve.
Nevertheless, Hapag-Lloyd stated that the Gemini network has managed to perform well through the challenges.
“The second quarter was better than the first, driven by higher spot rates and strong demand,” said Hapag-Lloyd CEO Rolf Habben Jansen. “Our Gemini network remained resilient and continued to outperform the market, setting the industry standard for schedule reliability.”
These results reveal the unusual nature of the economic impact from the Hormuz disruptions. Carriers are spending significantly to reroute ships and cargo, yet these disruptions are also tightening available capacity and helping to increase freight rates.
Moreover, there are clear differences in how the effects appear for the two partners in Gemini.
Hapag-Lloyd identifies costs like inland transportation and service rerouting associated with the Hormuz disruption. On the other hand, Maersk, with a much larger logistics operation, sees landbridge solutions around the Gulf as a growth opportunity for its Logistics & Services business. Although their different business structures make direct comparisons challenging, this contrast points to the potential benefits of Maersk’s long-term strategy to move beyond just port-to-port shipping.
Maersk CEO Vincent Clerc described the quarter as an example of a “new era of heightened volatility,” as trade imbalances increasingly strain ports and inland transport systems.
“From ports to inland transportation, we are experiencing more congestion and disruptions across various regions,” Clerc remarked. “Our global team's ability to seize opportunities in these challenging markets has allowed us to achieve considerable growth in volume and earnings across our operations.”
Maersk has revised its full-year underlying EBITDA guidance to a range of $10.5 billion to $12.5 billion, up from $8 billion to $10 billion, while its underlying EBIT guidance is increased to $4.5 billion to $6.5 billion from $2 billion to $4 billion. The company also anticipates positive free cash flow.
Meanwhile, Hapag-Lloyd also boosted its outlook in July due to improved market conditions. The company now expects full-year EBITDA between $2.7 billion and $3.7 billion and EBIT from $100 million to $1.1 billion, though it warns that fluctuating freight rates and the conflict in the Middle East remain significant uncertainties.
For both partners in the Gemini Cooperation, the second quarter illustrates how the Hormuz crisis is a double-edged sword: creating hundreds of millions in costs while simultaneously tightening the shipping market that supports their recovery.