Denmark's Clipper Bulk is taking drastic downsizing measures to reshape its operations to fit the current coronavirus-hit market conditions.
The operator of handysize, supramax and ultramax vessels said it is reducing costs amid historically low freight levels caused by the pandemic.
To optimise its cost base, Clipper Bulk is axing 24 out of 91 jobs on shore at the end of April.
There are no furloughs, but the company said it is offering various "mitigating measures to the employees affected".
Changes will predominantly be introduced to the head office in Copenhagen.
"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," said chief executive Peter Norborg.
"We need to adapt to this new reality, and we are making these changes to stay ahead of the situation."
Action not hope
He said downsizing is essential to cut costs.
Norborg added: "Rather than hoping that markets will normalise in three to six months, we are taking the steps required to run a viable operation in today’s depressed markets."
Clipper is also focusing on even more rigorous efforts to leverage Clipper Bulk’s positions of strength in various trades and routes, as well as its long-term partnerships with clients, technical and commercial managers and other stakeholders, the company said.
Business focus will primarily be on profitable niche operations.
These include Clipper Steel, a service to the US and Mexico with the part-owned IPA Steel Terminal, and Compass Rose, a joint-venture with a Colombian manufacturer of fertiliser.
Other operations include China Parcel, which transports cargoes from consignors into China, combined with back-hauls into the Atlantic, as well as Brazil Steel, an associate of Clipper Steel.
Income from these niche operations is expected to fully cover Clipper Bulk’s cost base after the downsizing.
Furthermore, Clipper Bulk will continue to approach the spot market cautiously to serve long-standing customers and partners, the company added.
Pool growth unaffected
Clipper Bulk operates up to 85 ships at any one time, including pooled bulkers.
In March, the company bought the world's oldest pool, Bulkhandling, from Torvald Klaveness. This runs supramaxes and ultramaxes.
The owner's handy pool operates ships of between 28,000 dwt and 38,000 dwt.
Clipper has been reducing its owned fleet in recent years in a bid to become "asset-light."
The integration of Bulkhandling is continuing separately from the organisational changes.
Members are currently joining the new Clipper Bulkhandling Pool and vessels will be transferred within the near future.
"The pool’s activities are unaffected, and we look forward to announce new pool members soon," Norborg said.
"We will have adequate capacity to handle significant growth in the pool’s activities."
