Broader base, better quality – Insights into Hapag-Lloyds Terminal Business

Terminal investments are a key part of our strategy and will enable us to offer our customers Even better ocean and inland products by creating synergies with our liner business. Several investments in recent years, including in the Indian terminal and logistics giant J M Baxi, have vastly expanded our presence in the container terminal sector

Hapag-Lloyd is no stranger to infrastructure investments. We made our first one in Hamburg’s Container Terminal Altenwerder in 2001 and our second one in Tangier in 2019 – and the pace has only quickened since then. “We have taken a more strategic and structured approach to terminal investments since 2020,” says Sven Gailus, Managing Director Strategy at Hapag-Lloyd. “Until then, we had followed a clear pure play strategy by focusing exclusively on liner shipping. This has shifted as part of our Prepare for Tomorrow programme, and our beneficial financial situation is also allowing us to invest more in our business than initially anticipated.” In fact, the large size of our terminal portfolio has prompted us to start setting up a separate Terminals & Infrastructure unit.

Sven Gailus, Managing Director of our Strategy Office

"Terminal and infrastructure investments are now a crucial element of our strategic agenda. They help us to secure capacity, to boost the quality we deliver to our customers"

Since June 2023, Hapag-Lloyd has had two core lines of business: its liner business and its terminals & infrastructure business. A Rotterdam-based holding has been set up to look after Hapag-Lloyd’s investments in terminals and infrastructure, and Rolf Nielsen has been appointed its first Chief Operating Officer (COO). One of our goals is to have the best interests of our customers, employees and shareholders in mind to ensure consistent performance, development, reliability, access to key locations via the terminals, and more inland business.

Hapag-Lloyds terminal investments worldwide

Hapag-Lloyds global terminal portfolio has recently ballooned, expanding to 20 terminals and two terminal platforms comprising multiple terminals, supplemented by our inland logistics services. By January2023, the company held stakes in the Italy-based Spinelli Group, the Container Terminal Wilhelmshaven, the Container Terminal Altenwerder in Hamburg, Terminal TC3 in Tangier, Morocco, and Terminal 2 in Damietta, Egypt, which is currently under construction. In addition, the acquisition of the terminal business of Chile-based SAAM Terminals, including its related logistics services, was closed and successfully completed in August 2023. As a result of the acquisitions, the wider Hapag-Lloyd family will be welcoming around 8,000 new colleagues.

In geographical terms, this means that Hapag-Lloyd is now active in the terminal sector on five continents – Africa, Asia, Europe, North America and South America – and in five Hapag-Lloyd regions – Latin America, the Middle East, North America, North Europe and South Europe. The second most recent expansion of the terminal portfolio came in April 2023, when Hapag-Lloyd finalised its acquisition of 40 per cent of the shares of J M Baxi Ports & Logistics Limited. The Mumbai-based company is India’s largest integrated terminal and logistics player, holding first place among private logistics providers and second place among terminals, with 1.6 million TEU in annual throughput. In addition to having a strong presence on both the west and east coasts of India, the company also serves the key inland markets in the north of the country with its inland terminals and container train assets.

Nhava Sheva Freeport, close to Mumbai, accounts for 50 per cent of the total containerised cargo volume of the major ports of India

This investiment will enable Hapag-Lloyd to assume a leading role in the strategic growth market of India. The world’s most populous country has the fifth-largest economy and an annual GDP per capita growth of approximately seven per cent. On top of that, it has a comparatively low degree of containerisation.

Dheeraj Bhatia, Senior Managing Director Region Middle East

"The potential synergy between Hapag-Lloyd and J M Baxi is huge. We will benefit by having our services call at J M Baxi ports, which will enable us to internalise some margins and improve operational integration"

Teaming up offers Hapag-Lloyd and J M Baxi great potential to drive growth – especially since the Indian government is pushing to reduce logistics costs and make it easier to do business. At present, India is the fourth-largest market for container shipping. With a nine per cent share of this market and a current annual throughput of 1.4 million TEU, Hapag-Lloyd holds third place among container shippers in India. Additionally, J M Baxi has rail and inland depot services around India, which will help us to pursue an ambitious rail strategy to offer our customers even better inland services. 

Visakhapatnam is ideal for shipments to and from the Far East and Southeast Asia and is highly accesible to rail and road connections, which makes it the key gateway for containerised cargo on the upper eastern seaboard

Hapag-Lloyd’s new Terminals & Infrastructure unit will almost certainly play a more prominent role in the company’s “Strategy 2030”, which is currently being formulated. Having two lines of business in parallel will create operational synergies, reduce volatility, improve the product quality, strengthen collaboration with business partners, and secure access to key locations. At the same time, its terminal & infrastructure operations will act as a stand-alone business. In addition to supporting Hapag-Lloyd’s liner activities, they will continue to serve other liner shipping customers. For this reason, it will need to operate at arm’s length. “Our expansion into and diversification within the terminal business will reshape Hapag-Lloyd and yield positive results in both the short and long terms,” adds Heiko Hoffmann, Managing Director Mergers & Acquisitions at Hapag-Lloyd.

Heiko Hoffmann, Managing Director Mergers & Acquisitions at Hapag-Lloyd

“We have created a strategic roadmap for terminal investment opportunities to continue building up our global terminal portfolio. Going forward, we will focus on investments where we can have management control or at least an influence on the terminal operations so as to ensure that we can set the strategic and operational course of our investments.”

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