FRANKFURT: German container shipper Hapag-Lloyd said on Thursday the global oversupply of container ships and a crisis in the Red Sea will force it to cut costs in 2024, adapting sailings and ports following a bruising 83% fall in net profit.

Ship operators face prolonged disruption while Yemen-based Houthi are attacking vessels travelling on one of the world’s busiest routes, wiping out the benefit from higher freight rates with costly redirections around Africa.

Hapag-Lloyd’s problems chime with those of competitors such as Maersk and CMA CGM, exacerbated by the arrival of additional ships ordered during the pandemic years when they posted record profits due to logistics hiccups.

“We expect the market environment to continue to be difficult given the large number of ship deliveries this year,” said chief executive Rolf Habben Jansen.

“We need to further reduce our per-unit costs in order to remain profitable and competitive, going forward,” he said.