Just six months ago, it reported a €709 million profit. Today Hapag-Lloyd confirmed a €148.1 million loss for the same period a year on. Core earnings for the world's fifth-largest container line have collapsed from €618.9 million down to €15.6 million, while revenue only slightly dropped from €9.68 billion to €9.22 billion. For the UK marine insurance market - which has spent the past year repricing war risk across critical maritime chokepoints - these numbers offer a rare financial baseline for the operational realities of extended regional instability.
The swing in earnings was not driven by weakening demand. Transported volumes rose 1.5% to 6.7 million TEU, and average freight rates remained stable at $1,406 per TEU. Instead, cost inflation eroded operating margins. Hapag-Lloyd highlighted the operational disruption in the Strait of Hormuz alongside severe weather events along with costs such as insurance as the primary drivers of higher transport expenses. Within its core liner shipping division, earnings fell from a €584.6 million profit to a €17.6 million loss as rerouting extended transit times and pushed fuel expenses higher. Average bunker costs rose from $542 to $592 per tonne, while carbon emission certificate costs climbed to €96 million from €67.7 million.
These cost pressures reflect the broader dynamics affecting London’s war risk underwriters. Standard hull and cargo policies exclude loss or damage from military action and terrorism, requiring shipowners to purchase separate war risk cover priced as a percentage of the vessel's insured value. While these rates are nominal during periods of stability, reclassifying a transit corridor as high-risk leads to immediate rate adjustments.
The Strait of Hormuz has presented the most acute volatility for marine underwriters. Prior to the escalation in late February, war risk premiums for Hormuz transits stood at roughly 0.25% of hull value. Rates climbed rapidly from there, with peak rates surging as high as 10% of vessel value according to market insights from Marsh. A brief US-Iran memorandum of understanding in June eased rates back toward 2%, but renewed hostilities pushed ranges back to 7.5–10% by late July. Daily transits through the strait dropped by roughly 95% at the peak of the disruption. According to the Lloyd’s Market Association (LMA), this reduction was driven by shipowners and masters pausing sailings over crew safety concerns, rather than an absence of underwriting capacity or P&I cover in the London market.
At the same time, the Red Sea remained an active source of rate pressure. Following the Joint War Committee's expansion of its high-risk list in response to renewed targeting of commercial vessels, war risk premiums for select regional ports increased from 0.25% to 1% in short order. Together, the Strait of Hormuz and the Bab el-Mandeb strait account for approximately 30% of global container trade and 22% of seaborne oil. The scale of exposure across these routes has drawn growing focus from organizations like the World Economic Forum regarding capital adequacy and state-backed insurance mechanisms in scenarios where private market capacity pulls back. Trade reporting from Insurance Businesshas continuously tracked this repricing, illustrating how quickly these insurance shifts work through fuel, rerouting, and transit-time expenses directly into an operator's bottom line.
Beyond primary operational expenses, Hapag-Lloyd’s half-year disclosures point to broader legal and political risk exposures. Non-probable contingent liabilities increased to €170.6 million - up from €7.5 million at the end of 2025 - largely due to an ongoing customs dispute in Cameroon. Contingent tax liabilities also nudged higher to €286.5 million, reflecting active tax audits across Europe and the Middle East. Exchange-rate volatility further impacted the balance sheet, with the group recording €203.1 million in foreign exchange losses against €208.8 million in gains over the six-month period.
It’s not just the daily business - corporate strategy also faces these geographic headwinds. Hapag-Lloyd's proposed $4.2 billion acquisition of ZIM Integrated Shipping Services continues to await regulatory approvals following shareholder consent in April. If completed, the deal will combine two major fleets into an entity managing over 400 vessels and 18 million TEU annually. However, the transaction also expands Hapag-Lloyd's direct exposure to Middle Eastern transit lanes at a time when underlying operational costs remain elevated.
Despite these headwinds, Hapag-Lloyd raised its full-year EBITDA guidance in mid-July to a range of €2.3 billion to €3.2 billion. The upward revision reflects a sharp recovery in spot freight rates, as capacity absorption from longer round-Africa sailings and strong export volumes out of Asia continue to offset higher operating expenses. Meanwhile, broader macroeconomic projections from the International Monetary Fund continue to forecast 3.0% global economic growth, reflecting a market balancing Middle East friction against wider industrial momentum.
With Hormuz war risk premiums remaining elevated near their peak levels for the year and network disruptions persisting, Hapag-Lloyd's figures illustrate how physical transit risks translate into balance-sheet volatility - a dynamic likely to keep both premium volumes and claims complexity elevated across the London market.
