Startup Container Line Closes Down After Four Months
The transition to low freight rates has been hard on the small upstart container carriers that launched during the boom times of the late-pandemic era. Gone are the hefty profit margins of yesteryear, but the high charter rates that newly-minted carriers signed up for are still in effect - and generating enough revenue to pay those rates can be tough now that shipping demand has fallen.
Focus Container Line is the latest of these new carriers to start up and wind down long-haul vessel operations. The company just launched a new service from Ningbo to New Zealand and Australia on November 4 with a first sailing of the chartered feeder BBC Denmark. The other ship on the rotation, San Giorgio, departed November 19.
Four months later, the company has entered liquidation, and the Australian Securities and Investments Commission has put two independent directors in charge of its assets. About 100 of its customers' containers are now tied up at Ports of Auckland alone, according to the New Zealand Herald. The line's branded empties are stacked by the hundreds at container depots around Australia and New Zealand, awaiting a new fate, Daily Cargo News reports.
As of Sunday, San Giorgio was still under way, carrying Focus' cargo northbound through the Philippines towards China. BBC Denmark was also under way, bound for the small port of Gladstone, Queensland.
The business model for an aspiring new container line made sense in 2021-22, when capacity on established ocean carriers was tight and customers were willing to pay top dollar for expedited service. However, the cyclical industry has entered a slowdown, and marginal players are getting pushed to the side. Allseas Global Project Logistics, founded in early 2022, folded in October and now owes its creditors at least $70 million, according to The Loadstar. Asian carrier China United Lines (CU Lines), which decided last year to charter container ships and jump into the Asia-Europe trade, has announced early termination for 12 panamax boxships owned by Antong Holdings.