The recent liner start-up, The Containership Company (TCC), initially operating a no-frills shuttle from the Port of Taicang upstream from Shanghai to Los Angeles, has decided to cease operations and go into "reconstruction".
"I don't know what we're going to do, but it's looking very bad. It's not a profitable business," TCC chief executive Jakob Tolstrup-Moller told the maritime journal Tradewinds.
"We expect the outcome of the reconstruction will be that we pay all our creditors and protect all TCC's shareholders' interests; employees, investors, the shipowners, the owners of the equipment etc," he told American Shipper in an email.
"Our expectation that freight rates would rise this year hasn't happened, so we have been forced to terminate our transpacific service," Mr Tolstrop-Moller told London's Containerisation International.'
TCC said it lost US$7.4 million in its first eight months of operation, including $2 million in start-up costs. "The volume out Taicang has not been as anticipated, primarily due to the competitive situation between Chinese ports," said Mr Tolstrup-Moller.
In a filing to the Norwegian stock exchange, the company said it is now split into two units, the Denmark-based TCC A/S Denmark, which runs liner operations and TCC ASA (Norway), which manages the company's assets.
"Whereas TCC A/S is now under reconstruction, TCC ASA is still operating in a normal manner. TCC ASA will focus its business around chartering out vessels that TCC ASA either owns or has on long-term charter. Reconstruction is the best way forward to protect the assets in TCC A/S Denmark," he said.
TCC operates its single Great Dragon Service, recently adding the ports of Taicang, Ningbo and Qingdao to its initial Taicang-Los Angeles shuttle. The carrier offered low port-to-port rates, but as freight rates softened, bunker prices increased, TCC's business was exposed to increasing risk.
Forwarding giant Kuehne + Nagel sounded an ominous note on its sea freight Twitter feed, saying: "The Containership Company (TCC) is discontinuing transpacific service. Watch out: with these low rates and high bunker costs, carriers with small vessels will discontinue certain services. More to come!"
TCC will not complete eastbound voyages of its 3,000-TEU class ships, the California Dragon and Nanjing Dragon, due to depart Taicang May 7 and 14 respectively. Nor will it complete westbound voyages of the Jiangsu Dragon and Shenzhen Dragon, which were to sail from Los Angeles on May 8 and 16 respectively.
"I don't know what we're going to do, but it's looking very bad. It's not a profitable business," TCC chief executive Jakob Tolstrup-Moller told the maritime journal Tradewinds.
"We expect the outcome of the reconstruction will be that we pay all our creditors and protect all TCC's shareholders' interests; employees, investors, the shipowners, the owners of the equipment etc," he told American Shipper in an email.
"Our expectation that freight rates would rise this year hasn't happened, so we have been forced to terminate our transpacific service," Mr Tolstrop-Moller told London's Containerisation International.'
TCC said it lost US$7.4 million in its first eight months of operation, including $2 million in start-up costs. "The volume out Taicang has not been as anticipated, primarily due to the competitive situation between Chinese ports," said Mr Tolstrup-Moller.
In a filing to the Norwegian stock exchange, the company said it is now split into two units, the Denmark-based TCC A/S Denmark, which runs liner operations and TCC ASA (Norway), which manages the company's assets.
"Whereas TCC A/S is now under reconstruction, TCC ASA is still operating in a normal manner. TCC ASA will focus its business around chartering out vessels that TCC ASA either owns or has on long-term charter. Reconstruction is the best way forward to protect the assets in TCC A/S Denmark," he said.
TCC operates its single Great Dragon Service, recently adding the ports of Taicang, Ningbo and Qingdao to its initial Taicang-Los Angeles shuttle. The carrier offered low port-to-port rates, but as freight rates softened, bunker prices increased, TCC's business was exposed to increasing risk.
Forwarding giant Kuehne + Nagel sounded an ominous note on its sea freight Twitter feed, saying: "The Containership Company (TCC) is discontinuing transpacific service. Watch out: with these low rates and high bunker costs, carriers with small vessels will discontinue certain services. More to come!"
TCC will not complete eastbound voyages of its 3,000-TEU class ships, the California Dragon and Nanjing Dragon, due to depart Taicang May 7 and 14 respectively. Nor will it complete westbound voyages of the Jiangsu Dragon and Shenzhen Dragon, which were to sail from Los Angeles on May 8 and 16 respectively.