Hapag-Lloyd Reports $600M Middle East Disruption Costs, Backs ZIM Deal

Hapag-Lloyd has reported around 600 million dollars in cost headwinds from the Middle East conflict in the second quarter of 2026, while expressing confidence its ZIM acquisition will close towards year-end. The German liner operator said the blockage of the Strait of Hormuz drove additional costs across bunker, insurance, storage, rerouting and inland transport. Strong Asian exports and improved US demand partly offset the disruption, allowing the company to report EBITDA of 829 million dollars and raise its full-year outlook.

 

Impact of the Middle East Conflict

 

The company faced significant costs from regional disruption. It reported cost headwinds of around 600 million dollars. These stemmed from the Middle East conflict in the second quarter. The blockage of the Strait of Hormuz was the primary cause. This affected a critical shipping route for the company.

The disruption generated costs across multiple areas. These included bunker and insurance expenses. Storage costs also rose as a result. Service rerouting and inland transportation added further costs. Together these formed the substantial financial headwind.

 

Managing the Disruption

 

The company took action to mitigate the impact. It managed to move vessels it wanted out of the Strait of Hormuz. It offered alternative routings through land bridges. Company leadership said this approach was working well. However, it acknowledged the alternatives were more expensive.

The rerouting came with clear trade-offs. The alternative routes offered less capacity than before. This reduced the volume the company could carry. The higher costs and lower capacity affected operations. Despite this, the company maintained service through the disruption.

 

Financial Performance

 

The company's results showed a mixed picture. It reported EBITDA of 829 million dollars in the quarter. This was slightly higher than 820 million dollars a year earlier. However, EBIT decreased to 176 million dollars from 189 million. Group profit fell to around 83 million dollars from 306 million.

Several factors shaped these results. Strong exports from Asia helped offset the disruption. Improved US demand also contributed positively. Volumes and spot rates picked up significantly in the second quarter. This followed an unsatisfactory start to the year.

 

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Outlook and Strategy

 

The company raised its full-year expectations. It increased its 2026 earnings outlook on 13 July. Group EBITDA is now expected between 2.7 and 3.7 billion dollars. Group EBIT is expected between 0.1 and 1.1 billion dollars. This upgrade reflected the improved market conditions.

The company remains cautious despite the upgrade. It warned the outlook faces considerable uncertainty. Freight rates remain highly volatile. The ongoing Middle East conflict adds further risk. Company leadership emphasised strict cost discipline for the second half.

 

The ZIM Transaction

 

The company expressed confidence in its major acquisition. It remains focused on completing the ZIM transaction. Shareholders have already approved the deal. The company is now working through regulatory approvals. It still expects to complete the deal towards year-end.

The transaction has faced some opposition. Israeli media reported government agencies opposed to the deal. Critics questioned whether ZIM would retain its independence. Concerns were raised about ZIM's business presence in Israel. However, Hapag-Lloyd has committed to maintaining a significant presence there.

 

Strategic Significance of the Deal

 

The acquisition would strengthen the company's market position. It would reinforce its status as the fifth-largest container operator. The combined entity would have more than 400 vessels. Total capacity would exceed 3 million TEU. Annual transport volumes would surpass 18 million TEU.

The deal includes provisions for ZIM's Israeli operations. The company signed a binding memorandum with FIMI Opportunity Funds. This covers the transfer of ZIM's Special State Share. FIMI intends to establish a new Israel-based operator called New ZIM. This new entity would operate a fleet of 16 vessels.