Point of View : Holger Oetjen
Holger Oetjen, managing director of Hapag-Lloyd (Canada)
Hapag-Lloyd is a leading global liner shipping company. It transports more than five million TEUs (20-foot equivalent unit containers) annually. Hapag-Lloyd is celebrating 120 years of service through the Port of Montreal in 2012. PortInfo sat down with Holger Oetjen, managing director of Hapag-Lloyd (Canada) Inc., to discuss the company’s business through Montreal and various issues in the container shipping industry.
How has Hapag-Lloyd succeeded in growing its business through the Port of Montreal?
he purchase of CP Ships in 2005 and the subsequent integration of the business and network in 2006 has propelled Hapag-Lloyd into the leadership position for containerized ocean transportation all across Canada. Montreal, for Hapag-Lloyd, is the biggest volume port in our Canadian portfolio.
The efficiency of the service, which is not only covering the ocean leg but is reaching deep into the hinterland, is a crucial factor. The seamless connection to and from the U.S. heartland has allowed aside the Canadian volumes to take full advantage of the enormous potential this market holds.
Growth is currently driven by European imports, as economic difficulties and a very low euro are weighing on the export market.
Where does Hapag-Lloyd see opportunities for growth through the Port of Montreal?
In recent years, much of the growth for cargo via the Port of Montreal came from non-traditional markets in East or South Asia or Latin America. These markets are not covered by direct services, but rather are connected in transshipment via North European or Mediterranean ports.
At Hapag-Lloyd, we have so far participated in these potential areas only on a very selective basis. These markets do show relatively robust growth and will present significant opportunities for further volume increases in the future.
How does Hapag-Lloyd work with the Montreal Port Authority and other stakeholders/partners to increase business?
The strength of the so-called “Montreal model” or “gateway model” always has been and continues to be the cooperation of all stakeholders, first and foremost the port authority, the terminals, rail and the shipping line.
What is important is close communication and coordination to ensure a smooth and seamless service offering between the ship and the customer in the hinterland. With the realization that in an intermodal age cargo flows are volatile, all stakeholders need to share the vision of a strong gateway, which includes cost competitiveness as the second ingredient along with service.
What is Hapag-Lloyd's growth strategy both worldwide and in North America?
With demand for container transport services continuing to rise, container shipping will remain a growth industry in the long term. The global trade volume is expected to grow by 4% in 2012 and 5% in 2013, according to IHS Global Insight. The same growth rates apply for the following years up to 2016. Between 2011 and 2016, global transport volume will rise by 29% in total, says Global Insight. At the same time, the worldwide order book for new container vessels marks a historical low in relation to the active world fleet.
In order to utilize the medium-term expansion opportunities resulting from market growth and in order to realize economies of scale in our ship operations, Hapag-Lloyd will launch a total of 10 new very large container vessels into service, each with a capacity of 13,200 TEUs (20-foot equivalent unit containers). The first newbuilding was delivered in July and two more will follow this year – end of September and middle of November. The other seven units will be delivered in 2013.
However, Hapag-Lloyd acts very carefully when it comes to newbuildings and manages its fleet capacity very actively with a sound relation between owned and chartered vessels. Hapag-Lloyd belongs to the small group of market leaders in the industry with a very competitive and flexible fleet. We believe in profitable and at the same time sustainable growth with the market. This means that both the customer and Hapag-Lloyd as the service provider should benefit from a business relationship. This includes high-quality services as well as a sufficient level of rates.
What is Hapag-Lloyd's vision of the container shipping industry?
Two of the most important key factors for success in our industry will be operational excellence, on the one hand, and a close, personal customer relationship, on the other hand. Operational excellence includes continuous innovation in fleet and service network, reliability, efficiency, safety and lean processes for which cutting-edge IT systems are indispensable.
A success factor of growing importance will be a sustainable approach not only towards environmental and social issues such as the protection of the environment and its resources but also towards customer relationship. This has always had a high priority at Hapag-Lloyd, up into our top management and down to the daily work of our staff. Proof of that is the fact that Hapag-Lloyd has provided shipping services successfully for over 165 years now and for 120 years in Canada.