Hapag-Lloyd recently announced its first-quarter results, another record-breaking performance, with revenues of $9 billion and profits of $4.7 billion. Hapag-Lloyd's CEO, Rolf Habben Jansen, assessed that the long-term ultra-high freight rates in the container transportation market have peaked.

Rolf Habben Jansen said that, in general, the market is slowly but steadily normalizing. Despite the unpredictable direction of world economic developments this year due to the pandemic, supply chain bottlenecks, inflation and war, Rolf Habben Jansen believes the container transportation market is on its way to normalization. Freight rates have been steadily declining for several months, global economic growth is under pressure and there are many signs that the market will be more normalized in the second half of the year. Spot freight rate has jumped about 20 percent in the last few months, while the global economy is under pressure with rising energy prices, inflation and higher interest rates.

The Chief Financial Officer of Hapag-Lloyd, Mark Frese, said the second quarter will be better than expected but should be slightly lower than the first quarter. Hapag-Lloyd sees more than just a slight dip for the third and fourth quarters. The company's performance expectations imply that second-half earnings will be down nearly 50 percent from the first half.

Half of Hapag-Lloyd's 2022 freight volume is under long-term contracts and the other half is the spot (90% of the long-term contracts are one-year contracts and 10% are two-to-three-year contracts). "Although spot freight rates are expected to fall further, our long-term contracts will protect our revenues at least to some extent," Frese said.

He expects, "We will see a significant drop in spot freight rates in the second half of the year. Maybe we'll even see a shift between long-term and short-term rates, with spot freight rates lower than long-contract rates."