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When most people think of German shipping companies, the first thing that comes to mind is the market giant Hapag Lloyd. The industry is actually diverse, as many shipping companies are small or medium-sized.
It’s not the size that matters: This apparently applies to shipping, among other things. “When operating ships, economies of scale, the so-called economies of scale, are not so important,” says Nikolaus Schües, President of the industry association BIMCO. “Shipping companies don’t necessarily save a lot if they have a large fleet. As a shipowner, you can also operate just a few ships “manage profitably”.
Giants like Hapag Lloyd from Hamburg are appearing in public, with sales of almost 35 billion euros in the record year 2022. The majority of German shipping companies, on the other hand, are owner-managed medium-sized companies. The Association of German Shipowners lists a good 170 members. These include the industry giants for scheduled services, ferry services and cruises. However, most of the members are small and medium-sized companies backed by families or individual entrepreneurs.
Secretive Hanseatics
The legal form of the limited liability partnership (“GmbH & Co. KG”) is popular, as it offers little commercial transparency. Family businesses don’t like to talk about business figures anyway. When it comes to shipping companies, Hanseatic discretion is added. “Our company’s figures aren’t that interesting,” says a German shipowner in an interview. Ship entrepreneurs would much rather talk about how the state is making their lives and thus their business more difficult.
Old shipping families from Hamburg and Bremen are often in the industry. The shipping company “Aug. Bolten Wm. Miller’s Successor” still belongs to the heirs of August Bolten, who took over the business from founder William Miller in 1841. Other traditional companies were sold. The 200-year-old “F. Laeisz Shipping Company” passed from the Laeisz heirs to another entrepreneurial family.
Laeisz was famous for its sailing freighters, the last of which, the Passat, is a youth hostel in Travemünde. Her sister ship Peking is a museum ship in Hamburg, another sister ship, the Pamir, sank in a storm in 1957. The days of cargo gliders were long gone.
Renovation and recovery
Container ships have been dominant in Germany for decades. In the two decades before the financial crisis, container ships in Germany were often financed by private investors using tax-saving models. Overcapacity, shrinking world trade and financing problems caused such constructions to go bankrupt after 2008.
At that time, many shipping companies agreed to restructure, which resulted in billions in losses, especially for the then state-owned HSH Nordbank and Commerzbank. “Most German shipping companies are now solidly financed,” says Nikolaus Schües from the industry association Bimco. “After the shipping crisis, they paid off shipping loans, hardly bought any new ships and have recently done very good business again.” After Corona, demand grew rapidly in a market that had shrunk. Shipping companies made huge profits. Medium-sized companies like F. Laeisz also managed to do this, recording a profit of 55 million on sales of 270 million in 2022.
Last year, business was no longer fantastic, but it was still good. The industry is investing again in new ships and in the development and testing of new engines. For a long time, some medium-sized shipowners thought calls for replacements for ship diesel were just fashionable talk. “The whole industry is now getting involved in decarbonization,” says industry expert Schües. “Everyone has recognized that. Of course, the changeover costs a lot of money. But when you break it down to the sneakers that we import from Asia, it’s only small amounts of cents.”
Bertram Rickmers’ bankruptcy
Good business acumen, big names and family traditions are important in the medium-sized shipping business. But it doesn’t protect against a lack of seriousness. Rickmers Holding AG went bankrupt. It belonged to Bertram Rickmers, scion of an old shipping family, which is commemorated by the tall ship Rickmer Rickmers in the port of Hamburg.
Bertram Rickmers died last year. In contrast to his brother Erck, who enjoyed an impeccable reputation in Hamburg, Bertram was a controversial businessman. A restructuring concept had also been developed with HSH Nordbank for his shipping company. It would have drastically reduced Bertram Rickmers’ influence. Shortly before completion, Rickmers tried to overturn this by secretly changing the statutes. The bank lost trust and the shipping company was liquidated. In 2017 it went bankrupt.
Insolvency administrator Jens-Sören Schröder is now suing the heirs of the late bankrupt. He has evidence that Rickmers illegally withdrew hundreds of millions from the shipping company. The creditors of the shipping company bond met last week in the Hamburg Literaturhaus to discuss how to proceed. Ten years ago you invested 275 million euros in a bond issued by the Rickmers shipping company. Now they hope that the lawsuit will be successful. Then they would see their money again. With interest and compound interest, a good 300 million are now outstanding.