Clipper Bulk Cuts Staff amid 'Historically Low Freight Markets'
Dry bulk operator Clipper Bulk announced it will reduce onshore staff in an effort to narrow costs amid historically low freight markets dragged down by the coronavirus pandemic.
“The dry cargo market has struggled with unsustainably low freight rates for years, but the COVID-19 pandemic has made matters worse and caused a steep downturn in demand and freight rates. We need to adapt to this new reality, and we are making these changes to stay ahead of the situation,” said Clipper Group CEO Peter Norborg.
The company said Thursday it will cut 24 out of 91 jobs ashore by the end of April, mostly at its head office in Copenhagen, and offer mitigating measures to affected employees.
“While we deeply regret the implications for staff, the downsizing is essential to adjust costs to prevailing markets,” Norborg said.
In addition, Clipper Bulk said it will sharpen its focus on leveraging its "positions of strength", including its Clipper Steel service to/from the US and the Mexican Gulf with the part-owned IPA Steel Terminal; Compass Rose joint-venture with a Colombian manufacturer of fertilizer; China Parcel cargoes from more consignors into China, combined with back-hauls into the Atlantic; and Brazil Steel, an associate to Clipper Steel.
The company expects income from its key "profitable niche operations" to cover its cost base after the downsizing.
“Rather than hoping that markets will normalize in 3-6 months, we are taking the steps required to run a viable operation in today’s depressed markets,” Norborg said.
Clipper Bulk noted it will continue to approach the spot market cautiously to serve long-standing customers and partners.
Clipper Bulk operates 65-85 vessels, including tonnage operated by the two Clipper Bulk-managed pools: the Clipper Handy Pool (28-38,000 dwt vessels including fully fitted loggers and grabs-fitted vessels) and the newly acquired Clipper Bulkhandling Pool (57-64,000 dwt, grabs-fitted vessels), which it is merging with its Ultra Pool.
“The pool’s activities are unaffected, and we look forward to announce new pool members soon. We will have adequate capacity to handle significant growth in the pool’s activities,” Norborg said.