Japan’s Daiichi Chuo Kisen Kaisha plans to halve its current ‘long-distance’ fleet by returning chartered-in vessels to their owners and will renegotiate charter rates to improve its profitability, reports say.
The company, which filed for bankruptcy in Tokyo on September 29, plans to reduce its overall number of ‘long-distance’ vessels from 120 to around 50, all of which will be owned by the company, according to Nikkei reports.
Its owned fleet currently consists of 42 vessels, comprised of five capesizes, six supramaxes, three post-panamaxes, three panamaxes and 25 handysize bulkers, according to shipping databases.
Currently, Daiichi has around 100 vessels chartered in from Japanese and international shipowners, of which it plans to retain around 40.
The charters of the vessels Daiichi intends to keep have been renegotiated, reports say. Fixed-rate contracts will be changed to market-based rates, which are generally around 50% lower and should help Daiichi improve its profitability, it is hoped.
Company president Masakazu Yakushiji told Nikkei that, based on Daiichi’s current volume of trade, 40 vessels would be the most appropriate size for the company’s long-distance fleet.
Daiichi does not plan to cut its fleet for domestic and short-haul routes, for which profits have remained stable. The company has around 20 vessels dedicated to the coastal trade around Japan.
Last week, Daiichi Chuo sold a capesize bulker to compatriot company NS United for $60.38m.
Daiichi’s stock will be delisted from the Tokyo Stock Exchange on October 30.