The Containership Company ends service: `It`s looking very bad,` says CEO

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.