Senator Lines to cease operations

 

   German ocean carrier Senator Lines will cease business at the end of the month.

   As a result of the financial and economic crisis and -- as a consequence thereof -- reduced volumes together with overcapacity and an extreme unhealthy competition, especially on the east-west routes, the shareholders and the board of Senator Lines have decided to cease business effective end of February 2009, the company said in a statement issued from its headquarters in Bremen.

   Senator, which is 80 percent owned by the Korea's Hanjin Shipping, said, There are no positive signals to be foreseen for 2009 and there are not even any freight rate improvements visible on the long term. All these facts have resulted in this painful decision.   Senator sought to reassure customers, saying that it will recognize every order and deliver all containers to destination. All other obligations will be honored as well.   Hanjin said it will utilize the slots previously provided to Senator Lines.

   Philip Damas, division director at Drewry Supply Chain Advisors in London, said it was unavoidable that a medium size carrier would fail in this incredibly tough market adding I think there may be a couple of others before it stabilizes.   Together, Senator and Hanjin are the 10th-largest container shipping company in the world, controlling 378,282 TEUs, about 2.9 percent of the world's container capacity, according to the information service AXS Alphaliner.

   While Senator charters two ships, nearly all of its capacity is chartered from Hanjin.

   The company has 14 services, through three have been temporarily suspended because of the downturn in the shipping market.

   The only services not operated in conjunction with Hanjin are two strings between Montreal and the Mediterranean operated with Hapag-Lloyd, and a service between Europe and the East Coast of South America operated with CMA-CGM.

   Senator has 171 employees around the world, including 98 in Germany, with 83 at the company's Bremen headquarters.

   A spokesperson said she was not sure how many Senator employees might be offered jobs with Hanjin or what the future of the Senator services to Montreal or to the East Coast of South America with CMA CGM would be.

   Senator was founded in 1987 by Karl-Heinz Sager, a former executive board member of Hapag-Lloyd, and offered a fortnightly round-the-world-service.

   Following German unification it merged in 1994 with the shipping line division of Deutsche Seereederei Rostock, an East German state-owned enterprise founded in 1952 and the Bremer Vulkan Verbund AG in Bremen.

   In 1997, Hanjin became the main shareholder of the company. It owned 80 percent of the company and 10 percent stakes had been held by Bremer Investitionsgesellschaft mbH big in Bremen and the shipping company F. Laeisz in Hamburg.

Source: American Shipper