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Zeaborn: Germany’s shipping consolidator

Zeaborn, Germany’s chief consolidator of shipping lines, is looking to further strengthen its position as one of the leading fully integrated shipping companies in the world, likely to profit from the continued doldrums among many of its struggling peers on home soil.

The German shipping industry has been hard hit in the past few years, its commercial shipping fleet has shrunk by a third over the past six years along with a series of bankruptcies. Once the world’s predominant shipping lenders, most German banks have now abandoned ship finance to write off tens of billions of nonperforming loans.

Germany has also become the largest seller of secondhand tonnage in the past six years, having sold nearly 1,700 ships between 2012 and the end of 2018.

The Zeaborn Group was founded by Kurt Zech together with Ove Meyer and Jan Hendrik Többe in 2013. Currently the company has four main business segments, shipowning, shipmanagement, liner services and tramp services.

Zeaborn now manages the fifth-largest MPP fleet in the world and it is also expanding its business in the area of technical and commercial management. In 2017, the company entered the liner sector by taking over Rickmers-Line.

Ove Meyer, managing partner of Zeaborn, admits the breakbulk and project cargo shipping markets have got off to a slow start this year, however a gamechanger could be in the offing during the second half of the year.

“This change is not driven by cargo volumes, it is mainly driven by the environmental regulations and by the sustainability of the worldwide tonnage available,” says Meyer.

“The frame parameters are bringing a new reality into the sector. The 2020 sulphur cap as well as ballast water treatment (BWT) are a significant challenge to the technically and financially massively stressed world fleet. We see new ownership of significant parts of the currently stressed tonnage, mainly under the control of the financing banks,” Meyer believes.

According to Meyer, currently about 30% of the world MPP fleet is not able service their debts. These assets are being held by banks and are ready to be traded off.

Meyer also sees the end of pool solutions and operators, as financial pressure on owners and operators is increasing, and it is leading to a more selective view from customers, who have started raising what he says are overdue questions of who is the carrier and their financial standing. This become far more evident after Hansa Heavy Lift filed for chapter 11 last year, becoming breakbulk’s Hanjin moment.

“It is a crucial question today, when it comes to shipments with a lead-time of more than three months, as most operators run their fleet on three-month charters or operating distressed ships on a pure management or pool basis, and are not able to secure the availability of tonnage for forward shipments,” Meyer explains.

In Meyer’s opinion, the consolidation in the MPP sector will probably continue throughout this year and the first half of 2020, in what is already one of the shipping sectors to have experienced the greatest contraction of players in recent years.

“With the overlapping of 2020 regularities and outstanding BWT requirements, there will be only a few companies able to cope with the new economic environment. This situation applies to the whole MPP sector, owners as well as technical managers and operators. From what we see today, this process will be even fuelled in the second half of 2019 by customer requirements and actions taken on the side of financing banks,” says Meyer.

In the past two years, Zeaborn absorbed two compatriot shipmanagement companies Rickmers Shipmanagement and ER Schiffahrt, and integrated the two units into one global brand, Zeaborn Ship Management.

The combined technically managed fleet currently comprises more than 150 ships.

With regard to future investment, Meyer says the company has a clear picture of the structural fleet requirements and the company is eyeing younger secondhand tonnage including the vessels the company is currently taking over from bust Hansa Heavy Lift fleet.

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