CLIPPER BULK A/S, A GLOBAL OPERATOR OF HANDYSIZE, SUPRAMAX AND ULTRAMAX VESSELS, TODAY ANNOUNCES INITIATIVES TO REDUCE COSTS AMID HISTORICALLY LOW FREIGHT MARKETS, CAUSED BY THE COVID-19 VIRUS PANDEMIC. INITIATIVES INCLUDE ORGANIZATIONAL DOWNSIZING.

Clipper Bulk A/S, a global operator of Handysize, Supramax and Ultramax vessels, today announces initiatives to reduce costs amid historically low freight markets, caused by the Covid-19 virus pandemic. Initiatives include organizational downsizing.

To optimize its cost base, Clipper Bulk cuts 24 out of 91 jobs ashore end April. 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. 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,” says Clipper Group CEO Peter Norborg.

Clipper Bulk offers various mitigating measures to the employees affected.

A specialized operator The organizational downsizing is combined with 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 as well as other stakeholders.

Business focus will primarily be on Clipper Bulk’s profitable niche operations, such as Clipper Steel (service to/from the US and the Mexican Gulf with the part-owned IPA Steel Terminal), Compass Rose (joint-venture with a Colombian manufacturer of fertilizer), China Parcel (cargoes from more consignors into China, combined with back-hauls into the Atlantic), Brazil Steel (associate to Clipper Steel), etc.

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.

“Rather than hoping that markets will normalize in 3-6 months, we are taking the steps required to run a viable operation in today’s depressed markets,” says Peter Norborg.

Pool build-up unaffected
Clipper Bulk’s integration of the newly acquired Bulkhandling Pool continues unaffected by the organizational changes. Clipper Bulk recently took over rights, trademarks and key people in order to merge the Bulkhandling Pool with Clipper’s own Ultra Pool. 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. We will have adequate capacity to handle significant growth in the pool’s activities,” says Peter Norborg.

Clipper Bulk operates 65-85 vessels, including tonnage operated by the two Clipper Bulk-managed pools: The Clipper Handy Pool (28-38,000 dwt vessels incl. fully fitted loggers and grabs-fitted vessels) and The Clipper Bulkhandling Pool (57-64,000 dwt, grabs-fitted vessels). The pools offer participants critical mass and cooperation on commercial and technical issues.