A number of German containership owners have agreed to participate in a scheme designed to raise charter rates for feeder vessels, but banks are said to be less enthusiastic.
The proposed Baltic Max Feeder project has outraged European feeder operators who believe the plan to pool ships in a single company and establish a charter rate floor would be anti-competitive and breach antitrust laws.
That concern has been raised in German shipping circles as well, according to Hermann Neemann, managing director of the Haren-based tax consultancy firm Anchor and architect of the Baltic Max Feeder concept that has been on the drawing board for a few weeks.
Despite such misgivings, Mr Neemann confirmed today that some owners had already pledged to take part in the project, although he declined to reveal their names. “The participation of the owners is not the bottleneck,” he said.
”The really critical issues are financing and the question of whether antitrust authorities will approve the plan,” said Mr Neemann.
The project cannot work without the backing of banks that would have to guarantee owners’ payments.
Responding to critics who argue that the Baltic Max Feeder vehicle would violate European competition rules, Mr Neemann acknowledged that this issue remained unresolved.
“To date, there has been no breakthrough,” he told Lloyd’s List.
Baltic Max Feeder would be a new company that would take control of as many as 500 feeder vessels and then only charter them out at rates equivalent to operating costs plus bank interest. If those rates are not reached, the ships would be left at anchor.
Charter rates based on that formula would be well above current levels, leaving charterers fuming that those same owners now complaining bitterly about trading conditions did little to help their customers when charter rates were sky high.
Operators such as Delphis/Team Lines, Sea Consortium/X-Press Container Line and Unifeeder would be badly affected if owners succeed in controlling the supply of tonnage, and warn that they would probably have to levy a surcharge on their customers, the deepsea lines, that in turn would be passed on to shippers and retail prices.
Ships of up to 1,400 teu would be able to participate in Baltic Max Feeder, with full details of the proposal contained in a letter sent to interested parties earlier in the month. That was followed up by a meeting in Haren late last week where the idea gathered plenty of support.
But European feeder operators have said they would strongly oppose any attempts by containership owners and banks to manipulate the charter market and force up rates, with the proposal described by one line as tantamount to a price-fixing cartel.
Sea Consortium has just extended the 2006-built 917 teu Beluga Majesty and Beluga Mobilisation for seven months at a reported $4,250 a day. A year ago, ships of that size could have commanded more than $12,000 a day.
German ship finance groups HSH Nordbank and Deutsche Schiffsbank are among those said to be considering the scheme. Owners wanting to participate in Baltic Max Feeder would have to pay up €10 per teu as registered capital of the company. In total, Mr Neemann estimates that €50m in funding resources would be needed this year, followed by €65m in 2010 and €20m in 2011.
The proposed Baltic Max Feeder project has outraged European feeder operators who believe the plan to pool ships in a single company and establish a charter rate floor would be anti-competitive and breach antitrust laws.
That concern has been raised in German shipping circles as well, according to Hermann Neemann, managing director of the Haren-based tax consultancy firm Anchor and architect of the Baltic Max Feeder concept that has been on the drawing board for a few weeks.
Despite such misgivings, Mr Neemann confirmed today that some owners had already pledged to take part in the project, although he declined to reveal their names. “The participation of the owners is not the bottleneck,” he said.
”The really critical issues are financing and the question of whether antitrust authorities will approve the plan,” said Mr Neemann.
The project cannot work without the backing of banks that would have to guarantee owners’ payments.
Responding to critics who argue that the Baltic Max Feeder vehicle would violate European competition rules, Mr Neemann acknowledged that this issue remained unresolved.
“To date, there has been no breakthrough,” he told Lloyd’s List.
Baltic Max Feeder would be a new company that would take control of as many as 500 feeder vessels and then only charter them out at rates equivalent to operating costs plus bank interest. If those rates are not reached, the ships would be left at anchor.
Charter rates based on that formula would be well above current levels, leaving charterers fuming that those same owners now complaining bitterly about trading conditions did little to help their customers when charter rates were sky high.
Operators such as Delphis/Team Lines, Sea Consortium/X-Press Container Line and Unifeeder would be badly affected if owners succeed in controlling the supply of tonnage, and warn that they would probably have to levy a surcharge on their customers, the deepsea lines, that in turn would be passed on to shippers and retail prices.
Ships of up to 1,400 teu would be able to participate in Baltic Max Feeder, with full details of the proposal contained in a letter sent to interested parties earlier in the month. That was followed up by a meeting in Haren late last week where the idea gathered plenty of support.
But European feeder operators have said they would strongly oppose any attempts by containership owners and banks to manipulate the charter market and force up rates, with the proposal described by one line as tantamount to a price-fixing cartel.
Sea Consortium has just extended the 2006-built 917 teu Beluga Majesty and Beluga Mobilisation for seven months at a reported $4,250 a day. A year ago, ships of that size could have commanded more than $12,000 a day.
German ship finance groups HSH Nordbank and Deutsche Schiffsbank are among those said to be considering the scheme. Owners wanting to participate in Baltic Max Feeder would have to pay up €10 per teu as registered capital of the company. In total, Mr Neemann estimates that €50m in funding resources would be needed this year, followed by €65m in 2010 and €20m in 2011.