News
- Hanjin calls time on Senator Linie
- 2/4/2009
Hanjin calls time on Senator Linie
Patrick Hagen and Mike Grinter - Wednesday 4 February 2009
The Montreal Senator. pic: Senator Lines
BREMEN-based boxship operator Senator Linie will close down at the end this month, the latest casualty of the container shipping meltdown.Parent company Hanjin Shipping said yesterday that its shareholders had decided to halt Senator’s shipping activities with immediate effect. The South Korean company has held a majority stake in Senator since 1997, with an 80% interest.
The remainder is owned by the city state of Bremen’s investment vehicle with 10%, and Bremen-based ship financier F. Laeisz also with a 10% holding.
Senator’s container services were provided by a small fleet of vessels that were mostly chartered from Hanjin Shipping.
“Rates are so low that you cannot make money,” a Senator spokeswoman said of the decision to shut down. “With [ocean freight] rates around zero, it is not enough that you are as well utilised as we are.”
Senator was not insolvent, she continued, but would be wound up.“We will fulfil all of our commitments so that all transport orders will be executed and all containers will be delivered,” the spokeswoman added.
The container line, set up in 1987, made a loss in most years but reported its first profit of $14m in 2007. Figures for 2008 have not been published.
Senator — ranked 109 in the world — is part of Cosco, K Line, Yang Ming, Hanjin alliance and offers 14 liner services, mostly between Europe and Asia, where freight rates have collapsed in recent months.
Most of Senator’s services were operated in co-operation with majority owner Hanjin Shipping.Senator’s German offices in Bremen, Hamburg, Munich and Düsseldorf will be closed. A total of 98 staff in Germany will be made redundant.
Hanjin Shipping has its own German offices in Bremen and Hamburg.
Senator’s shareholders, management and the works council have already agreed on a redundancy payment scheme for employees.
The future of international Senator staff is still unclear. The company has offices in China, Dubai, Canada, Cyprus and the UK. Some of these offices are operated in co-operation with Hanjin.
“We do not know yet whether any employees will be absorbed by Hanjin,” the spokeswoman said. She added that the future of the Canadian office would depend on whether the service Senator offers between Montreal and the Mediterranean would be continued by the parent company.
Senator’s capacity consists mainly of slots chartered from Hanjin and its alliance partners. The line has only two vessels on charter: the 2,100 teu Genoa Senator, owned by a German KG fund, and the 2,100 teu Montreal Senator, chartered from Greece-based Danaos Shipping.
A Hanjin spokesperson said it was too early to say if Senator routes would be discontinued or of the number of lay-offs.
A few months ago, Senator had been preparing to expand its network after an earlier restructuring exercise.
The company said last June it was considering new services and the expansion of existing ones. “The focus will be laid on the expansion of competitive new niche lanes and businesses to achieve a better-balanced business portfolio,” said commercial management director Jens Philippi at the time.
But future growth was clearly not an option when the winter of zero ocean rates hit the liner business at the end of last year — the final nail in the coffin for Senator.
News that the company founded by German shipping executive Karl-Heinz Sager was to close came as little surprise in liner shipping circles, with one broker describing Hanjin’s decision as effectively a rebranding exercise.
Source: http://www.lloydslist.com/ll/news/viewArticle.htm?articleId=20017614573