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Clipper Bulk to axe staff amid weak freight market

Bulker operator Clipper Bulk has announced job cuts starting end-April amidst a dry bulk shipping market struggling with ‘historically’ low freight rates due to the coronavirus (COVID-19) global outbreak.

Clipper Bulk will cut 24 out of 91 jobs ashore end-April, with the changes predominantly taking place in its head office in Copenhagen, Denmark.

“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 Peter Norborg, ceo of Clipper Group.

“We need to adapt to this new reality, and we are making these changes to stay ahead of the situation. While we deeply regret the implications for staff, the downsizing is essential to adjust costs to prevailing markets,” he added.

Looking ahead, Clipper Bulk will focus on the more profitable niche operations such as steel services, fertilizer manufacturing and parcels transportation.

Income from these niche operations is expected to fully cover Clipper Bulk’s cost base after the downsizing.

“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,” Norborg commented.

The company highlighted that its integration of the newly acquired Bulkhandling Pool is not affected by the organisational changes. “The pool’s activities are unaffected, and we look forward to announce new pool members soon. We will have adequate capacity to handle significant growth in the pool’s activities,” Norborg said.

Clipper Bulk operates 65-85 vessels, including tonnage operated by the two Clipper Bulk-managed pools, the Clipper Handy Pool (28,000-38,000 dwt vessels) and the Clipper Bulkhandling Pool (57,000-64,000 dwt, grabs-fitted vessels).

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