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Geo-political uncertainty propels Lufthansa Cargo's Q2

Lufthansa's logistics division - whose main component is Lufthansa Cargo, posted an adjusted EBIT in Q2 of €116m, an increase of 58% on the same period last year while revenues were up 27% year on year (YoY) to just over €1bn. Commenting on the quarter at conference call in Frankfurt earlier today, attended by The Loadstar, group chairman and CEO, Carsten Spohr, said: "The second quarter operating environment for air cargo was anything but easy, the conflict in the Middle East affecting the reliability of global supply chain networks which had to be adjusted at short notice in an environment like this, one thing becomes clear once again. The more complex and unpredictable the global economy becomes, the more a growing cargo business, like Lufthansa Cargo, shows its worth." He continued: "In particular, the crisis in the Middle East triggered a surge in demand on routes to the Far East and for our new and now almost daily, trans-Pacific connection, as well as our new intra-Asian routes." He went on to highlight that "this commercial success was the result of the consistent execution of our strategy and our increasingly strong focus on high-margin products, semiconductors and more and more IP server equipment for the growing AI-driven investments in computers around the world and data centres". In a statement issued before the conference call, the Group noted that in the context of a significantly changed market environment, due to the conflict in the Middle East and the corresponding reduction in competitors' capacities in the region, Lufthansa Cargo's freight business had "gained momentum in overall terms". The reduction in the volume of capacity on the market and the strong rise in fuel costs led to a significant increase in yields compared to previous quarters. Demand was driven by continued strong business in the Asia/Pacific region in particular. This was reflected in an increase in cargo tonnage. India had also performed strongly. Higher fuel and charter costs in particular had a negative impact on expenses. Capacity, expressed as available cargo tonne kilometers (ATK), grew a modest 2% versus the previous year mainly driven by 6% bellyhold growth, particularly from Italian airline subsidiary, ITA Airways. Traffic, expressed as revenue cargo tonne kilometers (CTK) increased 3% YoY while the cargo load factor was stable at 62.9%. Mr Spohr also drew attention to the modernisation of Lufthansa Cargo's ground infrastructure. "At the end of June, we brought the first and most important phase of our new Frankfurt cargo centre into operation. This will make our handling operations even more reliable, more efficient, and more productive, and obviously will contribute to the premium positioning of Lufthansa Cargo." He also remarked on the Group's internationalisation strategy which was beneficial to Lufthansa Cargo with the integration of the marketing of ITA Airways' cargo capacity and closer co-operation with other passenger airlines in the Lufthansa portfolio.

Chinese EV boom fuels demand and charter rates for car-carriers

Charter rates for modern car-carriers are moving towards the $100,000 a day mark again - powered by rising demand for Chinese electric vehicle exports. While VesselsValue shows average charter rates for car-carriers at around $67,000 a day, new vessels can command a higher rate. Last week, Atlas EMF, a joint-venture between Greek shipowner Atlas Maritime and European Maritime Finance, chartered the 7,000 ceu Clean Star to an unnamed Chinese operator for two years, for $80,000 a day, prior to its expected delivery from CIMC Raffles shipyard this month. Atlas CEO Leon Patitsas said: "This agreement reflects the exceptional quality of the vessel, the continued confidence of leading operators in our fleet, and the strong fundamentals of the global vehicle carrier market." In March, another of Atlas EMF's new car=carriers, the 7,000 ceu Eco Star, was fixed to Wallenius Wilhelmsen for a year, at $53,000 a day, shortly after delivery. The spike in charter rates within five months highlights how demand is strengthening for modern vehicle carriers. SAIC Anji Logistics, the shipping arm of SAIC Motor, recently chartered Eastern Pacific Shipping's newly built 7,060 ceu car carrier Lake Rotorua for $90,000 a day, shortly after delivery by China Merchants Jinling Shipyard, Nanjing. Car-carrier charter rates hit $100,000 a day in August 2022, before 'normalising' in late 2024, as record numbers of newbuildings were delivered. Now, China's vehicle exports are on a bull run, fuelling demand for ships to carry them. China Association of Automobile Manufacturers' statistics show nearly 5.1m vehicles exported during the first six months - up 65.3% year on year. New energy vehicle exports exceeded 2.3m units, more than double last year. In June, vehicle exports reached 1.037m, up 75% from a year ago, marking the first time China's monthly automobile exports exceeded a million units. With tonnage tight, even older car-carriers can command a decent charter rate. Two, belonging to SFL, the 6,500 ceu SFL Composer and SFL Conductor, built in 2005 and 2006 respectively, were fixed to Cosco at around $40,000 a day for 34 months. And the demand for tonnage is reviving newbuilding orders for car-carriers, after only nine were commissioned last year. So far in 2026, at least 40 have been ordered. MSC's car-carrier arm, Global Car Carriers, has commissioned ten LNG dual-fuelled car-carriers, comprising six at 8,600 ceu and four of 7,000 ceu, for delivery 2028-2030. The larger ships will be built by China Merchants Heavy Industry Yizheng, the others will be equally split between CMHI Weihai and Guangzhou Shipyard International The rising market has also attracted an opportunistic newcomer, China-based Zhongnan Shipping, which has ordered four 5,700 ceu car-carriers at Jiangsu Runyang Shipbuilding, for delivery between 2028 and 2029.

Covid's legacy: 'Flexibility has replaced efficiency as box shipping's guiding principle'

India is emerging as one of the biggest beneficiaries of the post-pandemic shift towards more resilient global supply chains, with container shipping data showing its exports to the US continuing to strengthen. Xeneta chief analyst Peter Sand told The Loadstar: "When carriers adapt to the de-risking of supply chains set up by shippers, it involves more shipments out of India." Indeed, he noted that freight rates from India to the US east coast were on track "to be at an all-time high next week", said Mr Sand. "If we see early indicators from Xeneta data, we could be as high as $7,400 per 40ft, and still climbing." The growth reflects a broader trend of importers diversifying sourcing from China as they seek to reduce geopolitical and supply chain risks, he said. "There's more to global shipping than the main tradelanes," Mr Sand added. The Loadstar previously reported that one European freight forwarder said high demand on the India-North Europe trade, paired with capacity constraints, was making getting shipments out of India "nigh-on impossible". The forwarder was having to book space "four-to-six weeks in advance", and had seen carriers cancel bookings rather than roll cargo when space was tight. The resilience of Indian exports reflects a wider transformation in global supply chains, according to Braemar, which added that the container market had "fundamentally changed" since Covid, with resilience replacing efficiency as the industry's defining principle. "Today, uncertainty has become part of the business model. Importers no longer wait for stability before making decisions. They diversify suppliers, adjust sourcing, build inventory when necessary, and bring cargo forward when risks emerge. Flexibility has replaced efficiency as the guiding principle," explained Braemar analyst Jonathan Roach. "The industry no longer expects calm waters. It expects disruption," he added. While Mr Roach highlighted that "none of this means container shipping has become immune to shocks", he underscored that the industry was "unlikely to be caught offguard" in the same way it once was. "Covid did more than disrupt global shipping. It changed its mindset. For decades the industry pursued efficiency above almost everything else. Since 2020, it has pursued resilience, flexibility and speed of response. "That may prove to be the pandemic's most enduring legacy."