Digital Edition

May 12, 2014

Issue link: https://jocdigital.uberflip.com/i/311703

Contents of this Issue

Navigation

Page 5 of 79

RICKMERS, HANJIN SHAKE UP MANAGEMENT FOLLOWING DISAPPOINTING FINANCIAL results, Rickmers and Hanjin shook up management late last month. The news that high-profile executive Ron Widdows would step down from his post at German shipowner Rickmers Group surprised the industry. Widdows, who joined the Hamburg- based company in February 2012, will be replaced by current Deputy CEO Ignace Van Meenen. Wid- dows, a former CEO of Singapore's Neptune Orient Lines, will join the advisory board of Rickmers Holding and retain his role on the board of A.R. Maritime Investments, a joint venture with U.S.-based private investment group Apollo Global Management. Rick- mers didn't give a reason for ending Widdows' tenure as CEO. Hanjin shareholders' decision to appoint chairman Cho Yang-ho as CEO of South Korea's largest shipping line is seen as the latest attempt to shore up the company's shaky financial foundation. Cho will replace his sister-in- law, Choi Eun-young, in heading Hanjin Shipping. He will be CEO of five companies under the group umbrella, including Korean Air. Shareholders also voted to merge Hanjin Shipping with the shipping and brand management business of Hanjin Ship- ping Holdings, which was spun off as a new entity of Hanjin Shipping Holdings. The Korean car- rier has been trapped in a managerial crisis with former CEO Kim Young Min resigning late last year after taking responsibility for two successive years of losses. Cho has vowed to transform the company into a global leader, saying the company would be able to overcome its current difficulties and "bounce back as a global player." DREWRY: MASSIVE WAVE OF MIDSIZE SHIPS LOOMS THE CONTAINER SHIPPING industry likely faces a massive surplus of ships capable of carrying 4,000 to 5,000 20-foot-equivalent container units, many of which will be scrapped regardless of their age, Drewry Maritime Research warns. The wave of unneeded vessels is set to hit the industry in 2016, when the expanded Panama Canal opens; the expansion will triple the waterway's capacity. There is already a growing surplus of so-called Panamax vessels because of the cascading of surplus ships into the north-south trades, the London-based firm said. Mediterranean Ship- ping Co.'s recently announced service between Asia and West Africa deploying 10 4,000-TEU ships underlines a growing difficulty for the north-south trades, as the surplus of Panamax ships keeps charter rates low, making it easier for competing carriers to penetrate markets more deeply, regardless of demand. A similar scenario is playing out in the Asia-Australia trade, where average vessel size rose from 4,365 TEUs in the third quarter of 2013 to 4,900 TEUs by Janu- ary 2014, and rates have turned more volatile, according to Drewry. Likewise, capacity on the Asia-Brazil head-haul route spiked 17.9 percent from January to July 2013, while cargo volume rose only 4.1 percent year-over-year, resulting in a combined $152 million in losses for ocean carriers in the first half of 2013, Neil Dekker, Drew r y 's head of resea rch, told t he JOC's TPM Asia Conference last fall. Nea rly 380 ships with capacit y of 4,000 to 4,999 TEUs are deployed in services that don't transit the Panama Canal or are laid up, so a transfer of just a small number of the 258 vessels using the waterway would cause a shock to the system, according to Drewry. Some of the surplus ships will be scrapped; 19 Panamax vessels were sent to the breakers' yards in the first three months of 2014, compared with just seven through 2013. NEW G6 SERVICES MAY CRIMP TRANS-ATLANTIC CAPACITY SHIPPERS FACE A temporary space shortage in the trans-Atlantic because of the entrance of the G6 Alliance in the trade. MOL and APL recently told customers they anticipate a capacity shortage in their trans-Atlantic services in coming weeks as the G6 Alliance rolls out services in that market. The G6 currently operates in the Asia-Europe and Asia-U.S. East Coast markets, but is expanding into the trans-Pacific and trans-Atlantic following approval by the Federal Maritime Commission in April. From mid-May through mid-June, there will be a "severe reduc- tion/shortage of space" in at least some of MOL's North America-North Europe services because of implementation of new G6 services and vessels, an account representative said in an e-mail last week to Richard A. Gareau, president of Midwest Transatlantic Lines. The G6 comprises APL, MOL, Hapag-Lloyd, Hyundai Merchant Marine, NYK Line and OOCL. MOL, however, has a "protect list" for those four weeks, implying that at least some customers will not be affected. MOL continues to accept bookings in the North America-Europe trade and has no plans to stop, an MOL representative said. An APL spokesman said "capacity adjustments can be expected in any major service transition where vessels are being repositioned," although they "strive to offer shippers the best possible services." Spotlight 6 THE JOURNAL OF COMMERCE www.joc.com MAY 12.2014 6 THE JOURNAL OF COMMERCE www.joc.com

Articles in this issue

Archives of this issue

view archives of Digital Edition - May 12, 2014