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NYK to focus on long-term charters for capesize business

NYK to focus on long-term charters for capesize business
Nippon Yusen Kaisha (NYK) is building up long-term contracts for its capesize bulker business as it aims bring it back to a stable profit.

In an address to employees for NYK’s 129th anniversary president Yasumi Kudo highlighted the problems that charter free capsize vessel have had on its dry bulk business.

“During the current fiscal year, we will be able to complete redelivery of the majority of the very costly medium-term chartered vessels that have been causing difficulties for a long time. This will leave us with only four to five of these costly ships,” Kudo said. The remaining expensive medium-term charter vessels will be redelivered in fiscal year 2017.

Where the company needs charter free vessels to serve its customers he said they should make more use of short-term chartered in ships.

For the capesize sector Kudo said they must restore the original business model of targeting iron ore and other cargo with a stable profit to cover capital.

“Because we are steadily building up long-term contracts in countries such as China and India, in addition to moving ahead with redelivery of costly chartered vessels, we can say that this goal is in sight,” he explained.

A similar situation is seen for its panamax fleet where the principle cargo is coal.

Bulkers account for nearly half of NYK’s fleet of 900 vessels.