SOVIET BID FOR REEFER TRAFFIC ATTRACTS INTEREST

SOVIET BID FOR REEFER TRAFFIC ATTRACTS INTEREST

A new reefer shipping joint venture, supported by a number of lines from the former Soviet Union, is winning applause for initiative and starting to attract some interest.

So far, the new operation is not causing too many sleepless nights among the long-established operators of refrigerated vessels, but shipbrokers say the consortium may have a greater impact next season.Seven shipping companies last year formed a new jointly owned agency, Trans Ocean Express Ltd., which will arrange charters for the refrigerated vessels owned by the partners.

Trans Ocean is seeking business for its parent companies in the crosstrades and to and from the new republics.

The partners hope to be able to offer a more efficient service by pooling resources and working together rather than competing against each other, said Daniel Lev, president of Trans Ocean.

The company is based in New York, chosen because of the good marketing opportunities and vastly better communications services than in the former Soviet republics.

Trans Ocean is not directly operating any reefer services, but is leasing the ships to other specialty lines.

As the reefer shipping season started to pick up last month, the company had 29 ships on charter by the end of January out of a potential pool of around 50 vessels.

Mr. Lev expects demand for Trans Ocean vessels to increase in the coming weeks as the season approaches its busiest period.

Unlike some of the liner and bulk shipping lines from the Commonwealth of Independent States, there has been no evidence of Trans Ocean offering cut- rate charters to build up business, according to shipbrokers that specialize in this trade.

But the venture is handicapped, to some extent, by the type of shipping being offered, industry watchers say.

The ships can only carry deep-frozen produce, such as fish and meat, and are not suitable for fruit, vegetables and other produce that need to be chilled rather than frozen.

This will limit the trades in which the ships can be deployed, according to a U.K. reefer shipbroker.

One important area of business for Trans Ocean ships is shipment of meat

from South America to the Middle East or Far East.

Frozen-fish exporters in New York also have expressed interest in chartering the ships. But the pool will be excluded from some other reefer trades because of the limitations of the ships.

Nevertheless, one leading shipbroker in the reefer trades expressed confidence in the long-term future of the joint venture.

"There's definitely a place in the market," he said.

The average age of ships in the Trans Ocean Express pool is around seven years, according to Mr. Lev, and the partners are investigating the possibility of buying new vessels. Analysts also agree that the fleet needs to be updated.

But, although the ships now deployed are not as versatile as those of competitors, Trans Ocean enjoys some benefits and cost advantages, according to trade experts.

The ships have Russian crews, and some are registered in the republics,

helping to lower running costs. Furthermore, Trans Ocean is well-placed to

serve captive trades in the new republics.

The reefer shipping industry is waiting to see whether Trans Ocean decides to operate its own services.

The new venture probably was too late to try and secure business for the current season, but may start talking to shippers about contracts for next year, brokers said.

The Trans Ocean concept could be a model for other shipping lines from the former Soviet union to follow, according to Stuart Kenner, managing director of the U.K. ship credit analysis firm Marine Credit Reporting Ltd.

He thinks it makes sense for the various lines to combine their specialist services to benefit from economies of scale and joint marketing efforts.

The seven partners in Trans Ocean Express are Vostokrybkholodflot Shipping Co., Vladivostok; Sevrybkholdflot Shipping Co., Murmansk; Kalingrad Reftransflot Shipping Co., Kalingrad; Klaipeda Reftransflot Shipping Co., Lithuania; Riga Reftransflot Shipping Co., Latvia; Ygrybtranssbyt Shipping Co., Sevastopol; and Commercial Shipping Co., Vladivostok.