[EN-SEA] TCC's COO : Great Dragon Keeps It Simple With One Transpac Route

LAUNCHING a new container carrier in such uncertain times seems risky to many, but to The Container Shipping Company of Norway, the time is right, according to its chief operations officer Franck Kayser.

In an extended interview with London's International Freighting Weekly (IFW), Mr Kayer said this was the perfect time for such a launch.

"The market has hit the bottom; for the first time in the history of containerisation. Volumes dropped last year and indications are that everything is as low as it has ever been. So, if you want to invest money, the chances that everything will get better are higher when you are at the bottom of the market," he said.

"Non-operating shipowners have been pushed to the side and the operators have been concentrating on their own vessels. That has led to a common approach to increase prices, and nobody is breaking ranks and going for market share because no one can afford to," he said.

But he doesn't expect TCC to make a profit this year, but sees profitability in a stable market that lies ahead. "It's difficult to put a timeline on it," he says. "But we see at least a three- or four-year stable market."

Most expected TCC to focus on Asia-Europe, but the transpacific looked better, and the company now offers a five 2,700- to 3,000-TEU ship "no-frills" shuttle between the MOL's TraPac terminal in Los Angeles and Taicang, a manufacturing town 60 kilometres up the Yangtze from Shanghai.

"By going between two ports, your assets sweat comparatively more than if you have an 8,000-TEU ship and operate through Asia to the US west coast. With large ships, you have to source cargo from many ports and operate a hub-and-spoke system and feeder cargo, which gives you considerably more cost," Mr Kayser said.

"The port-to-port concept also means that our utilisation of the ship and of the bunkers is on a par with our competition operating larger ships."

The no-frills part of TCC is that it only offers ocean carriage and not much more.

"We're not offering to take containers to Nebraska or Chicago. We operate with 20 people with 20 mobiles, who can be reached any time. And with a small team, we can be very responsive to clients and whatever service issues they might have," he said.

"Our rate structure is clear: we have an ocean rate, we have a bunker adjustment factor and we have an origin terminal handling charge.

We don't have any extra charges for carrying shoes, or any of the thousand and one extra surcharges others have. For us, a box is a box, it doesn't matter if it has got shirts or snorkels in it," Mr Kayser said.

Source : HKSG, 27.04.10.