Annual Report 2023

Risks and opportunities

1. Market environment

Developments in container throughput, transport volumes and logistics services

The pace of growth in those economies with flows of goods supplied by HHLA is a key precondition for the future development of container throughput, transport volumes and logistics services.

At the time of reporting, the International Monetary Fund (IMF) expects steady growth of 3.1 % for the global economy in the years 2023 and 2024. Owing to ongoing global economic and political tensions, this forecast is, however, subject to uncertainty.

The growth forecast for China – the most important shipping region for the Port of Hamburg – is above the global average at 5.2 % for 2023. Economic growth of 4.6 % is forecast for 2024. The Chinese economy is thus recovering from its below-average growth in 2022, primarily as a result of state investments in renewable energies. The weaker outlook for 2024 is partly due to economic challenges facing the real estate market.

The IMF forecasts a slight recession (– 0.3 %) for Germany in 2023. Although modest growth of 0.5 % is expected as of 2024, this is still well below the expected growth for the global economy as a whole. Economic environment

There are opportunities for a stronger volume trend in connection with the growth potential of Central and Eastern European economies such as Poland, the Czech Republic, Slovakia and Hungary, which use the Port of Hamburg for a significant proportion of their intercontinental trade. Should the economic trend exceed expectations, prompting stronger volume growth, this could present an opportunity to profit from higher earnings by achieving economies of scale in handling and boosting volumes in downstream transport systems. However, this scenario is countered by the challenges mentioned, which means that the likelihood of such opportunities arising during the coming year is uncertain.

The market research institute Drewry is now forecasting zero growth for global container throughput in 2023 but expects a growth rate of 2.3 % for 2024. These estimates are also subject to uncertainty due to the ongoing geopolitical tensions.

Although they remain material for HHLA, the associated volume and capa­city risks remain possible. Outlook for sector development

Throughput and transport volumes in the markets of relevance to HHLA are monitored closely to ensure trends are recognised at an early stage. Where scalable, controllable costs and investments – e.g. for the further expansion of the container terminals – are adjusted in line with the foreseeable level of demand.

Competitive environment

The competitive environment on Europe’s northern coast is characterised by fragmentation on the one hand and the increasing influence of shipping companies on terminals on the other. Competition remains fierce. Reliability and a high degree of quayside productivity, coupled with attractive container services and competitive prices, are central to the active positioning of Hamburg’s container terminals. Clear objectives for increased productivity and improved operating costs have been defined as part of the modernisation investments and gradual transformation processes. These are to be implemented progressively up to 2025. Other factors affecting the competitive position of terminal operators are the geographical location of ports, the scope and quality of their hinterland links and their accessibility from the sea.

Price sensitivity of shipping company customers may increase for both overseas traffic and transshipment, which could lead to a shift in volumes to competitors. The prospective strategic investment in HHLA by the Mediterranean Shipping Company (MSC) – which is currently subject to various conditions being met – also poses the risk that other shipping company customers may withdraw volume from Hamburg. This is offset by agreed volume commitments and the opportunity for additional volume from MSC, which is largely due to come into effect from 2025.

The fierce competition for container transport by rail remains high as a result of various observable market trends, such as plans announced by shipping companies and logistics firms to establish their own transport routes. For HHLA’s Intermodal subsidiaries, the risk of volume being re-routed and revenue being lost is therefore largely unchanged, although the prospective strategic investment by MSC may also increase the risk of other clients withdrawing volume. On the other hand, there is an opportunity for increased volume from MSC in container transport by rail.

HHLA constantly improves its competitiveness by enhancing its service quality and operational capabilities. Its ship handling activities focus primarily on increasing the efficiency of its handling services and addressing the increasing number of peak loads prompted by the handling of container mega-ships. HHLA is working on innovating its systems and optimising processes to strengthen its position in handling technology.

In the Intermodal segment, the reliability and punctuality of train connections, the scalability of the shuttle system, the expansion of the terminal network and a competitive cost base remain key prerequisites for the expected growth of rail transportation. Investments in our own hub terminals and the expansion of the network through the construction or acquisition of further terminals (including construction of another new hub in Hungary) will strengthen the performance of HHLA’s hinterland network. Having said this, intermodal traffic is also dependent on the productivity of upstream and downstream carriers. Any restrictions in these areas can directly affect our own services and result in the loss of volume and earnings. Intensive customer communication and high flexibility make it possible to mitigate risks. Moreover, regulatory measures may increase the competitiveness of rail transportation in the intermodal marketplace.

Customer structure

As a result of fierce competition, HHLA remains exposed to risks and opportunities from temporary or structural shifts in services provided by shipping company customers between the North Range ports and in the Port of Hamburg. As volumes per service and ship call increase with the use of ever-larger vessels, the impact on capacity utilisation at seaport terminals also grows. Changes to the syndicate structures of shipping company customers could have a direct impact on throughput volumes at the HHLA container terminals. Due to the expiry on 25 April 2024 of the block exemption regulation as an exception to the EU anti­trust laws that apply elsewhere, new partnerships are expected in the short to medium-term. The risks resulting from significant changes to the current service structure still remain possible.

In the field of ship handling, HHLA cooperates with many shipping companies on a neutral basis (“multi-user principle”). This enables HHLA to respond flexibly to changes in the container liner shipping sector. This neutrality remains in place even in the case of a strategic investment in HHLA by MSC.

As a result of the non-controlling interest of 24.99 % held by CSP, CTT will be developed into a preferred handling location for COSCO traffic, where freight flows between Asia and Europe will be concentrated. This non-controlling interest will also result in a proportionate transfer of market risks to CSP.

In addition, HHLA aims to enhance added value for its customers by expanding its mega-ship handling activities, continuing to develop the quality of its services and operational capabilities, and optimising client-specific processes.

Depending on the customer structure, even smaller affiliates may become reliant on individual clients. Various steps are taken to counteract this reliance, such as optimising service quality. At the same time, efforts are made to attract new clients.

Energy price increases

Fossil fuels are exposed to procurement price risks owing to geopolitical factors and environmental policy targets. These risks can adversely affect the earnings of the energy-intensive Container and Intermodal segments. Moreover, the extension of the tax-privileged use of port diesel in German seaports from mid-2024 is still pending at the time of reporting. The occurrence of risks related to energy price hikes is still regarded as possible.

HHLA is therefore taking steps to increase energy efficiency and pursuing a strategically focused procurement policy that favours electricity from climate-neutral production. It will be necessary to pass on price rises to the market where possible.

Traction/track costs

HHLA companies operating in the Intermodal segment pay track fees to the national railway companies or network operators for their rail network usage and in part also purchase traction services.

As the rail infrastructure in Germany is largely publicly owned, various authorities monitor non-discriminatory access and track fees. These authorities include the Federal Network Agency and the Federal Railway Authority in Germany as well as corresponding bodies abroad at EU level. The risk of increased traction/track costs therefore remains immaterial for HHLA. 1. Market environment, 4. Other risk and opportunity factors, 6. Strategic environment

To reduce the level of dependency on national railway companies for traction services and to enhance production quality, HHLA is expanding its own facilities and rolling stock in line with demand. Providing end-to-end transport services using the company’s own operating assets guarantees high quality throughout the process chain. HHLA’s objective is to offer its customers a logistics chain of unparalleled quality and reliability. This will further strengthen Hamburg’s appeal: high-performance seaport terminals promote higher volumes in the hinterland, while intelligent transport systems with low-cost structures boost container flows at the port.

2. Financial risks

Impairment of investments and assets

An economic trend that falls short of expectations may require adjustments to the valuation of assets. For example, the high level of fixed costs associated with large parts of HHLA’s business model means that it might not be possible to compensate fully for divergences in earnings caused by underutilised capacity in the short term if demand for HHLA’s services fails to materialise as expected. The terminal in Odessa is at risk due to the war in Ukraine: an impact on our results of operations, net assets and financial position is possible, while material risks (expropriation, destruction, breach of contract) are largely hedged by German government guarantees. Furthermore, impairment losses for software projects also can no longer be ruled out. Changing interest rates, triggered by inflation and a more restrictive monetary policy, are tending to lower present values when performing impairment tests. HHLA regularly checks for any impairment of its assets and makes adjustments where necessary. As in the previous year, impairment risks indicate a medium damage amount, with the occurrence of the risk still regarded as possible.

Bad debt losses

In recent years, shipping company customers have benefited greatly from high demand and freight rates driven up by competition, which resulted in positive earnings. This high level looks set to drop off in 2023 and beyond due to lower freight rates and overcapacities in shipping. Initial reports by shipping customers indicate significantly lower earnings for 2023. The impact of the attacks on ships in the Red Sea remains to be seen. 1. Market environment

In addition, there are uncertainties regarding a further slump in demand due to the economic situation, as well as the volatile development of bunker costs. As a result, risks of customer insolvency with the ensuing loss of throughput and bad debts in the Container segment are material once more, although these risks are deemed unlikely.

For Logistics properties and in the Speicherstadt historical warehouse district, there are still rent default risks and with them the risk of costs for any necessary modification or renovation of rented space. HHLA is in close contact with its tenants in order to adopt any necessary measures quickly. As in the previous year, it is deemed unlikely that any such risks will occur.

HHLA uses credit checks to reduce del credere collection risks. Active receivables management is used to monitor compliance with contractually agreed payment deadlines.

Currency risks

As the bulk of HHLA’s services are rendered within the eurozone, the majority of its invoices are issued in euros. The Intermodal and Logistics segments operate internationally, and a container terminal is operated in Ukraine (currently restricted). Invoicing here is primarily in euros or dollars. Currency or transfer risks therefore result primarily from exchange rate fluctuations affecting Central and Eastern European currencies. For this reason, it is impossible to rule out the risk of a devaluation of the Ukrainian currency, the hryvnia, compared to the budget estimate, especially in view of the war in Ukraine. This means that the relevant exchange rate risks are subject to high levels of uncertainty. There are also exchange rate risks related to the measurement of euro loans at companies which are paid out in local currency. The extent of these risks is influenced by both the development of exchange rates and the development of the loan portfolio. At present, the risks are lower than in the previous year; in the medium term, however, the risks could increase again, in particular due to the planned expansion of Intermodal activities.

All HHLA companies operating with foreign currencies reduce the risk of currency fluctuations by monitoring exchange rates regularly and, where possible, transferring free liquidity in local currency to hard-currency accounts. In the Intermodal segment, hedging transactions are regularly completed on the basis of existing currency hedging guidelines.

Pension obligations

The ECB has made interest rate adjustments in order to steady inflation rates. As a result, the reference interest rate that is relevant for pension obligations has been volatile. The risk of pension provisions increasing due to lower interest rates is higher than last year, although the risk of occurrence is still deemed unlikely. HHLA monitors interest trends so that it can adjust its provisions as necessary. For further details of downstream default risks, liquidity risks, interest and exchange rate risks, including risk mitigation measures and the management of these risks, please see the report on financial instruments in the notes to the consolidated financial statements. Notes to the consolidated financial statements, no. 47 Management of financial risks

3. IT risks

HHLA’s business processes rely heavily on the availability and security of IT applications. In the event of a cyberattack, temporary restrictions or failures in IT applications, e.g. due to the destruction of data, cannot be ruled out. Extensive protective mechanisms for incoming data and communication, as well as additional control measures serve to protect against attacks. In order to significantly reduce the impact of any damage, we maintain secure back-ups, for example. In view of the increasing threat level, the likelihood of this type of risk occurring is higher for HHLA than in the previous year. The damage amount associated with the risk of a damaging attack remains moderate.

4. Other risk and opportunity factors

Climate risks

The climate risk and vulnerability assessment conducted for the first time in 2022 in accordance with the requirements of the EU Taxonomy was reviewed in 2023. The results continue to show that the climate risks of floods and landslides as a result of extreme weather events, which have already been identified as material, are not expected to change significantly in the period under consideration until 2050 on the basis of current climate data. There are no other material climate risks at present. As a result, no further adaptive solutions or modifications to the existing measures are required at present.


As a result of the existing structural situation and the fact that HHLA’s Hamburg port facilities and buildings necessarily operate close to water, there is a fundamental risk of storm surges. However, flood protection work undertaken by HHLA and the Free and Hanseatic City of Hamburg in previous years has reduced this risk considerably. The residual risk was once again decreased further compared to the previous year.

Should this risk ever materialise, comprehensive emergency programmes have been put in place by public authorities and companies operating in the port as well as the Speicherstadt historical warehouse district, to minimise the potential damage. In addition, the risk of damage to property is sufficiently covered by insurance policies.

Extreme weather events

In the course of climate change, an increase in extreme weather events can also be observed in Europe. Intermodal transport operations in particular may be adversely affected by the weather-related landslips causing the closure of track sections. A high level of flexibility is required with regard to operating equipment and personnel to maintain rail-based container transportation. Operations in the Intermodal segment are systematically geared towards ensuring that customers receive the agreed service level, even in challenging weather conditions. As in the previous year, temporary increases in additional costs caused by specific events cannot be ruled out.

Investment options

In addition to organic growth, HHLA systematically examines and evaluates acquisition opportunities as part of its growth and innovation strategy. The focus is on equity investments in potentially attractive growth markets (investments to expand or supplement the portfolio in the core segments of Container and Intermodal), as well as in innovative technology companies and start-ups in the transport and logistics sector. In addition to strategic aspects and synergies with HHLA’s existing activities, key decision-making criteria include growth prospects, the anticipated return on capital employed, and the assessment of commercial opportunities and risks.

Technological innovations and digitalisation

One of HHLA’s goals is to relieve the pressure on the transport infrastructure in and around the Port of Hamburg by seeking innovative and sustainable solutions and using the capacities of its terminals more efficiently. To achieve this, HHLA uses machine learning at CTA and CTB, for example, to optimise the positioning of containers in the yard and thus boost productivity.

Furthermore, HHLA has set up new company units and invests in promising start-ups to provide the necessary space for technological and entrepreneurial innovation in logistics to flourish, especially with regard to innovative business activities along the material and digital logistics value chain. One example of this is the “modility” booking portal, a platform that simplifies access to intermodal transport.

The innovative development of our core business and the tapping of new growth drivers may produce additional opportunities for boosting efficiency and value added in future. Such opportunities are associated with certain start-up costs and an entrepreneurial risk that must be carefully reviewed and weighed up against the corresponding opportunities. Innovation

5. Service provision risks

Strike risks

Disputes relating to collective bargaining or transformation processes may lead to interruptions or delays to operations, with a corresponding impact on earnings, especially in the Container and Intermodal segments. As external strikes are relevant to the Intermodal segment, communication with clients and flexibility with regard to routing are effective measures for reducing the potential scale of damage. In the Container segment, internal industrial action cannot be ruled out. This is counteracted by means of extensive communication regarding transformation processes and the close involvement of the works council.

Price calculation risks in the Speicherstadt historical warehouse district

Due to the high level of capacity utilisation in the construction sector and the global shortage of building materials, price calculation risks were measured in the past year for construction projects in the Speicherstadt historical warehouse district for which contracts have not yet been awarded. Given their high likelihood of occurrence, these have been taken into account in our planning. Measures such as the close involvement of Purchasing in projects serve to optimise costs. No other risks have been identified at present.

Other operating risks

Moreover, transformation processes and the corresponding achievement of planned project targets may be delayed. We aim to prevent any delays by taking extensive communication measures and ensuring the close involvement of all parties. The risks are largely on a par with the previous year. In the light of transformation processes that will last several years, such risks will remain relevant over the medium term.

As stated in the previous year’s annual report, due to the special structures and age of the buildings in the Speicherstadt historical warehouse district, short-notice renovation requirements may go beyond the scope of our planning. This may result in unscheduled additional costs. No such risks are currently deemed material. Structural appraisals and expert assessments allow the early detection of any such risks.

6. Strategic environment


HHLA’s competitiveness largely depends on Hamburg’s infrastructure as a port and logistics hub. Hamburg’s offshore, onshore and regional transport networks must be able to cope with the flows of goods and their carriers. As an infrastructure-related operator, HHLA and its subsidiaries depend on prompt provision of the scheduled volume of public investments and services that are frequently necessary to support their own investments and ensure facilities are not jeopardised. Infrastructural deficits such as the current restrictions on navigability of the river Elbe due to silt could cause throughput and transport volumes to bypass HHLA’s sites. Attempts are currently being made to remove the restrictions on the river Elbe, which means that these risks are deemed unlikely to occur. How these risks will develop over the medium and long term remains to be seen.

The regional road and rail infrastructure must be modernised and expanded if the Port of Hamburg wants to retain and enhance its competitiveness while optimising processes for in- and outbound flows of goods in its hinterland. This may lead to additional costs or delays in the Intermodal segment due to bottlenecks in the rail network as a result of poor rail infrastructure or delays caused by construction work, for example. The flexibility of its own rolling stock helps to ensure that any impact on earnings from such events is unlikely and still not deemed a material risk to the HHLA Group. Projects of special significance to HHLA in the medium term include the replacement of the Köhlbrand Bridge, the construction of the port motorway access A 26 East and the maintenance and upgrading of the Kiel Canal, including its locks.

HHLA cooperates closely with the relevant public institutions on these projects. It also safeguards its interests by participating in relevant committees and through lobbying and active public relations activities.

7. Legal risks

Compliance incidents

Well-trained and motivated employees are the foundation of responsible business activities. The Group’s relationship with its employees is informed by its sense of social responsibility. Staff representatives are closely and actively involved in Group decision-making and take their responsibilities seriously. However, it is impossible to completely rule out the risk of employees committing fraudulent acts or legal and competitive violations in the course of their work. Furthermore, any infringements of specific areas of law (e.g. competition law, data privacy) may lead to fines based on Group key figures and could therefore potentially reach significant proportions.

To reduce these risks, HHLA has introduced guidelines, manuals and double-checking, embedded controls in its processes and established spot checks as part of its compliance management system. Furthermore, the Group has issued a Code of Conduct that applies to all Group managers and employees. In line with the current risk profile, training sessions are held regularly on the contents of the Code of Conduct as well as other specialised issues such as the prevention of corruption and conduct in the competitive environment. All of these activities are supported by additional communication measures, for example via the HHLA intranet. There are also opportunities for both employees and third parties to report violations via the whistle-blower hotline. Should compliance violations occur, specific process adjustments may be undertaken to prevent them in future. In cases of theft, for instance, corresponding security measures are reviewed and possibly introduced to prevent, as far as possible, any more such items going missing. Furthermore, regular analysis of compliance risks and IT-based business partner screening – which enables the risk-oriented screening of HHLA business partners across the Group – help to identify compliance risks at an early stage and thus minimise risk. This also applies to HHLA’s Supplier Code of Conduct, which is used throughout the Group.

Process risks

Changes in initial assumptions or general conditions may cause projects to fall significantly short of the underlying economic feasibility calculation. This may, in turn, necessitate the termination of long-term contracts and potentially result in legal disputes. HHLA adopts preventive measures, including the use of legal expertise, to prevent or resolve such disputes. At the time of reporting, there were no material risks in this regard.

New regulatory requirements

Changes to legislation, regulatory reforms or amended requirements may necessitate changes to HHLA’s internal processes or existing equipment, and could lead to cost increases. As in the previous year, no material risks have been identified in this regard.

Conversely, new regulations may also lead to opportunities that mainly boost the market potential of technological innovations.

EU Taxonomy
The EU taxonomy is a legally binding classification system that defines which economic activities of a company are considered sustainable. This is linked to specific requirements for the performance of business activities and the calculation methods of various key figures. The aim is to channel more investment into sustainable companies and technologies and thus support the European Union's 2050 climate neutrality target.
Economy of scale
A rule of economics which says that higher production quantities go hand in hand with lower unit costs.
A port’s catchment area.
Hub terminal (Hinterland)
A terminal which bundles and distributes consignments as hand­ling hub. HHLA’s rail companies operate hub terminals like this in Ceska Trebova, Budapest, Dunajska Streda, Poznan and Prague.
Impairment test
Assessment of an asset’s value in accordance with IFRS.
Intermodal/Intermodal systems
Transportation via several modes of transport (water, rail, road) combining the specific advantages of the respective carriers.
Payments for investments in property, plant and equipment, investment property and intangible assets.
North range
Northern European coast on which, in a broader geographical sense, all Northern European overseas ports from Le Havre to Hamburg. The four largest ports are Rotterdam, Antwerp-Bruges, Hamburg and Bremerhaven.
Revenue from sales or lettings and from services rendered, less sales deductions and VAT.
In maritime logistics, a terminal is a facility where freight transported by various modes of transport is handled.
The action of a locomotive pulling a train.
Value added
Production value – intermediate inputs (cost of materials, depreciation and amortisation, and other operating expenses); the value added generated is shared between the HHLA Group’s stakeholders, such as employees, shareholders, lenders and the local community.

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