Tuesday, October 27, 2009

More Charter Shipping Groups Beg For State Funds

Financial Crisis Comes Home for Shipowners
Shipping News Feature

GERMANY – Confirmation of the rumours which abounded last week that the country’s fleet owners are struggling in the current poor economic times. Companies, which for years have traditionally invested in container and bulk carriers to be leased on to the lines for charters worldwide, have now found their revenue streams shrinking in the light of new negotiations with hirers.

The woes of Hapag-Lloyd over the past few months have been well documented here and now other companies are looking to the government for similar state aid. The crisis may change the look of shipping forever as companies like Peter Döhle Schiffahrts KG are forced to pass round the hat.

Last week saw a familiar situation with the recapitalising of CCNI seeing its partners having to tolerate revised rates and charter contracts and with the situation now exacerbated by the number of vessels currently being acquired by the Chinese, it may mean that the German government will need to bail out the companies involved, most of whom are owned by hordes of private investors.

The crisis highlights differences between different ship owning nations. Whereas in the case of the German owners the risk is spread widely between these private individuals many of the owners elsewhere are companies run by small cartels who will have nobody to turn to when the funds run out. With approximately ten percent of container ship capacity world wide now sitting idle and loans harder to get it will be a case of who can ride out the crisis best and make gains from those who founder.

It may be that biggest in this scenario may very well prove best.