German shipping giant Hapag-Lloyd has been incurring an additional weekly cost of 50 million U.S. dollars on average since the war in Iran began in late February, a senior executive at the company said Friday.
Nils Haupt, senior director of Group Communications at Hapag-Lloyd said that the biggest cost drivers remain fuel expenses caused by the conflict, which has severely disrupted shipping in the Strait of Hormuz.
"This conflict is costing Hapag-Lloyd at least 50 million U.S. dollars more per week. For the entire logistics industry -- whether it's land-based logistics companies, airlines, or container shipping companies like us -- the biggest cost is fuel. As things stand, it seems unlikely that fuel prices will drop significantly in the coming days or weeks," said Haupt.
Haupt added that, beyond fuel, expenses related to insurance and temporary container storage have also risen sharply.
Currently, four of Hapag-Lloyd' container vessels remain stranded in the Persian Gulf, carrying an estimated 90 to 100 crew members. Haupt said supplies of food and fresh water on board remain adequate, but prolonged waiting in those waters is increasingly taking a psychological toll on the crews.
"The crew members are in good physical condition. We are able to communicate with them every day, and there is fresh food and fresh water on the ship. However, they have also said that after nearly ten weeks have passed, what they want most now is to pass through the Strait of Hormuz as soon as possible and get the ship sailing again," he said.
Hapag-Lloyd's weekly costs up by 50 mln USD due to Iran war: senior executive
