Berlin Presses Korean Shipyards to Delay Vessels

The German government is pressing South Korean shipyards to delay deliveries of container vessels to financially troubled German ship-owners.

The shipyards were also asked to reschedule payments for vessels during German president Horst Koehler's state visit to South Korea this week.

Some 195 vessels, mostly container ships, are due to be delivered to German owners in the coming months at a time when they are facing "ruinously low charter rates," according to Hans-Joachim Otto, parliamentary secretary of state at the German economics ministry.

Otto, who is accompanying Koehler on his visit, said it was in the interest of both sides to resolve their difficulties "in such a way that South Korean yards won't see their customers dying out."

There are fears many German ship-owners, who control the world's biggest container fleet, will go bust in the coming months because current charter rates don't cover ships' operating and financing costs. Some ship-owning funds have folded after failing to raise financing from investors and banks.

With nearly eleven percent of the world's container fleet idled because of a lack of cargo, ship owners also face increasing difficulties in obtaining charters for vessels that were ordered speculatively during the five-year container shipping bull market to mid-2008.

Berlin's plea to Korean yards coincided with reports that Germany's biggest ocean carrier Hapag-Lloyd is in negotiations with shipbuilders to delay deliveries and defer payments on some of the eleven ships of 96,250 20-foot equivalent units capacity it has ordered.

French ocean carrier CMA CGM, which has ordered 45 ships in Korea, also is trying to persuade yards to cancel 15 contracts and delay delivery of a further fifteen vessels.

Contact Bruce Barnard at brucebarnard47@hotmail.com.