Four 4,500-TEU container ships chartered by South Korea's Cho Yang Shipping Co. have been transferred to United Alliance partner Senator Lines after the charters were discontinued for financial reasons. A senior Cho Yang executive in the United States said the transfer occurred after the shipping company and the owner failed to agree on a new charter rate on the vessels. The ships, the Cho Yang Ace, Ark, Alpha and Atlas, operate on a Suez pendulum service connecting Asia, Europe and the U.S. East Coast. The executive said the stalled negotiations held up the Ace for a few hours earlier this week as it was entering Rotterdam.
'We felt the rates were higher than they needed to be,' the executive said, noting that rumors that the ship was arrested for non-payment of debt are 'grossly erroneous and overstated.'One executive in Europe with knowledge of the situation described things differently, stating that as much as US$4 million in outstanding payments are due on each vessel, and the total amount owed by Cho Yang on the ships may be in excess of $20 million.
Senator Line, which is 800wned by Hanjin Shipping Co. of South Korea, said the ships were 'amicably' transferred.
An announcement from Jan Boje Steffens, Senator's executive vice president for marketing and logistics, is posted on Senator's Web site at www.senatorlines.com.
It says, 'The members of the United Alliance have amicably agreed to re-arrange the vessel provision for the two Europe-Asia-American pendulum services (PDA, PDB). With effect of 16th January 2001, Senator Lines has taken over the four, 4,500-TEU vessels... from Cho Yang Line and entered into charter parties with the owners of said vessels. The vessels shall be soon renamed into Yokohama Senator, Portland Senator, Peking Senator and Penang Senator.'
The Cho Yang executive said the transfer will ensure no service disruption, and that Cho Yang's allocation on the ships won't change.
Cho Yang has faced severe financial difficulties in recent years, and is still recovering after undergoing a major corporate restructuring that involved selling certain business units. Over the years many rumors have circulated about company and its financial health, most of them inaccurate.
~ with contributions from Paul Richardson