Senator Lines cuts services, staff due to slumping Asia/Europe trade
German ocean carrier Senator Lines, a subsidiary of Korea’s Hanjin Shipping, will from next year cut staff, offices and its participation on six loss-making Asia/Europe services due to the rapid decline in freight rates in that trade.
The carrier has implemented a strategy called “Concept 2007” in an attempt to improve its results and secure its long-term competitiveness. The new plan will see the closure of the three regional offices in North Europe, Cyprus and Hong Kong with its head office in Bremen guiding all commercial and operational tasks, including the company’s own sales offices in North Europe, China, Middle East, Canada and South America. Senator Lines’ agency agreements in 64 countries will remain unchanged.
From January, Senator Lines will participate on 12 liner services covering North Europe, the Mediterranean, Asia, Middle East, Canada and South America, instead of the 18 as it does now.
Senator Lines does not operate any ships in the Asia/Europe trade but instead takes slots on the services of the CKYH Alliance carriers COSCO Container Lines, “K” Line, Yang Ming and its parent company Hanjin.
“The ‘Concept 2007′ is Senator Lines’ reply to the continuously problematic market situation with its highly critical slump in rates on the Europe/Asia trades despite an unchanged strong demand and with its tremendous increase of operational costs especially in charter rates and bunker,” the carrier said in a statement.
At the end of 2002, Senator Lines terminated all of its container services to and from the United States and shut down its U.S. regional organization to focus on other trades. “The strategic alignment of the European line being a specialist Europe/Asia carrier remains unchanged,” Senator Lines said.
“We have to assume that the rate pressure will last in the years to come and even will increase after phasing-in the new mega vessels. Our recent results cannot compensate this trend,” said Hans-Hermann Mohr, Senator Lines’ chief executive officer. “2006 will be a loss-making year for us. To confront this unacceptable development, the company decided the consequent implementation of the ‘Concept 2007.' We regret that this will be accompanied by redundancies at several locations of Senator Lines’ organization.
“Yet we are sure that the determined implementation of our centralization concept will secure a profitable future for Senator Lines in the long term,” Mohr said.