Caribbean Feeder Services (CFS), a Bermuda-registered shipping company that operates routes throughout the Caribbean, has seen its volume decrease by 21 per cent over last year, director Frank Wellnitz told Caribbean Business Report. The company is down to eight ships from a maximum of 10 when its growth peaked last year, and is running less frequently on its routes at slower speeds to reduce costs, Wellnitz noted.
"In 2008 it started to get shaky, but it was still a rather good year, Wellnitz said, noting the company in fact had its best year ever with sales well over US$50 million. The company serves global shipping giants, known as 'main liners' in the industry, which include Zim Lines, Hapag-Lloyd, Maersk, Evergreen, Cosco, Sea Freight. These main liners have their own commercial operations, owning the containers and serving major clients directly, whereas CFS is agnostic and will carry cargo for six or seven majors on any given route. Its ships vary in size between 225 and 500 twenty-foot equivalent units, the standard measure of capacity in container shipping. CFS ships call on 24 ports throughout the Caribbean basin, including Bridgetown, Barbados, Port of Spain, Trinidad, Cartagena, Colombia, and Veracruz, Mexico.
Kingston's container port is the operational base for the region's largest feeder vessel operator, Caribbean Feeder Services, which is reporting a steep decline in cargo volume.
Founded in 1999, CFS is an asset-light carrier operating under a JV with Bremen, Germany-based Harren & Partner Group, which commissions, owns, maintains and crews the ships used by CFS. The Kingston office of Spain-based Perez, which acts as its regional agent, manages its day-to-day logistics operations, while Wellnitz covers the commercial side of the business himself, obviating the need for employees in the company's business model. Because of the asset-light structure of the business, Wellnitz said CFS would not be an easy target for acquisition. Despite his 68 years, he said he has no intention of retiring.
Wellnitz said many routes around the Caribbean are now serviced by CFS every 10 days rather than weekly, and that its ships, which would typically travel at speeds of 15-16 knots, are now running around 12.5 knots to save on fuel. "Last year I had a weekly service to some ports without fail, this year I don't have weekly service without fail and my customers understand because I have less volume to carry," said Wellnitz, noting that CFS doesn't really have competition except when its customers can justify moving cargo they would normally farm out to the company themselves.
Almost all the cargo moved by CFS consists of trans-shipment containers, with regional cargo comprising no more than 10 per cent by volume. Wellnitz said regional cargo has also declined. "People are buying less, let's face, whether soft drinks out of Port of Spain for example, or computer parts," said Wellnitz.
Wellnitz said the company has had to reduce its prices while simultaneously tightening its belt as the demand for both regular service and charters has declined in the industry. "We have to make those adjustments, we need to stay in business, we want to stay in business," he said, noting the strategy was to hunker down and wait for better days and a return to profitability. "I believe we have reached the bottom.there's a feeling that the market is coming around."
While Jamaica is down in terms of both inbound cargo as well as in terms of trans-shipment volume, Wellnitz said the country's neighbour to the east is, ironically, the only market that has held up. "We have no break in volumes into Haiti," said Wellnitz, noting the constant stream of humanitarian aid into the Hemisphere's poorest country as an important factor.
"In 2008 it started to get shaky, but it was still a rather good year, Wellnitz said, noting the company in fact had its best year ever with sales well over US$50 million. The company serves global shipping giants, known as 'main liners' in the industry, which include Zim Lines, Hapag-Lloyd, Maersk, Evergreen, Cosco, Sea Freight. These main liners have their own commercial operations, owning the containers and serving major clients directly, whereas CFS is agnostic and will carry cargo for six or seven majors on any given route. Its ships vary in size between 225 and 500 twenty-foot equivalent units, the standard measure of capacity in container shipping. CFS ships call on 24 ports throughout the Caribbean basin, including Bridgetown, Barbados, Port of Spain, Trinidad, Cartagena, Colombia, and Veracruz, Mexico.
Kingston's container port is the operational base for the region's largest feeder vessel operator, Caribbean Feeder Services, which is reporting a steep decline in cargo volume.
Founded in 1999, CFS is an asset-light carrier operating under a JV with Bremen, Germany-based Harren & Partner Group, which commissions, owns, maintains and crews the ships used by CFS. The Kingston office of Spain-based Perez, which acts as its regional agent, manages its day-to-day logistics operations, while Wellnitz covers the commercial side of the business himself, obviating the need for employees in the company's business model. Because of the asset-light structure of the business, Wellnitz said CFS would not be an easy target for acquisition. Despite his 68 years, he said he has no intention of retiring.
Wellnitz said many routes around the Caribbean are now serviced by CFS every 10 days rather than weekly, and that its ships, which would typically travel at speeds of 15-16 knots, are now running around 12.5 knots to save on fuel. "Last year I had a weekly service to some ports without fail, this year I don't have weekly service without fail and my customers understand because I have less volume to carry," said Wellnitz, noting that CFS doesn't really have competition except when its customers can justify moving cargo they would normally farm out to the company themselves.
Almost all the cargo moved by CFS consists of trans-shipment containers, with regional cargo comprising no more than 10 per cent by volume. Wellnitz said regional cargo has also declined. "People are buying less, let's face, whether soft drinks out of Port of Spain for example, or computer parts," said Wellnitz.
Wellnitz said the company has had to reduce its prices while simultaneously tightening its belt as the demand for both regular service and charters has declined in the industry. "We have to make those adjustments, we need to stay in business, we want to stay in business," he said, noting the strategy was to hunker down and wait for better days and a return to profitability. "I believe we have reached the bottom.there's a feeling that the market is coming around."
While Jamaica is down in terms of both inbound cargo as well as in terms of trans-shipment volume, Wellnitz said the country's neighbour to the east is, ironically, the only market that has held up. "We have no break in volumes into Haiti," said Wellnitz, noting the constant stream of humanitarian aid into the Hemisphere's poorest country as an important factor.