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Shikoku owners round on Japan's Big Three

Imabari City: Some 250 delegates attending the 3rd annual Japan Ship Finance Forum were treated to a full and frank exchange of views between local Shikoku owners and Tokyo's Big Three operators - MOL, NYK and "K" Line - who charter most of their vessels.

The current plight of Shikoku owners - some 50 small companies from the Ehime region who collectively own more than 700 ships - had been outlined by earlier speakers at yesterday's event, organised by Marine Money and sponsored by local yard group Imabari Shipbuilding. With rates for long-term charters of their vessels fixed in advance, these owners have found their margins whittled away by massively increased operating expenses and a sharp appreciation of the yen against th dollar.

After hearing representatives of the Big Three outline a collective need to charter 500 more vessels between them in coming years, one Shikoku owner felt obliged to protest. Small local owners were very much 'discouraged' by the 'painful' operating environment, said Masashi Taga, president of Santoku Senpaku Co Ltd, and by a lack of support from ship operators enjoying "unprecedented profits."

Hironori Yamaguchi, MOL executive officer and gm of MOL's Bulk Carrier Division, was left to retort that the owners found themselves locked into long term contracts precisely because of their low equity stake - typically a maximum 5% - in the vessels. And he pointed out that MOL did not enjoy a purchase option at the end of such charter, meaning Shikoku owners were then free to dispose of the vessel as they wished and pocket the proceeds. Present pain, later gain.

A few more exchanges ensued (for full account see article in next issue of Seatrade magazine), after which it all ended amicably. But not a few people were left shaking their heads afterwards and calling such a public display of dissent "not the Japanese way."  [15/05/08]

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