HAMBURG

Only a few ship management companies in Germany will survive, says Christian Nieswandt, global head of shipping at German bank HSH Nordbank, which has been impacted by the crisis in German shipping.

He foresees a strong decline in the number of the 250 companies which currently operate in the German shipping cluster, even when recent years has seen the consolidation of companies that manage commercial operations of vessels.

"From my perspective, 20-30 of the companies have the ability to survive, if they are in a position to invest in new projects and get their fingers in new management contracts. Of the 250 companies in Germany, there is a large number of companies which have no future," he says in an interview with ShippingWatch.

The same prediction is echoed by several sources in the German maritime cluster which have been contacted by ShippingWatch. The problem for many companies is that they have few remaining contracts, no capital to invest in new vessels or no one wants them to operate their vesssels. It is thus only a question of time before they either disappear or are taken over by others, say many.

For a ship management company, the ability to attract new contracts is crucial. Each week, these contracts disappear from the portfolio, and if new ships don't arrive, the company will have to shut down.

"The problem for German shipping companies is that many of them are not in a position to secure new, profitable management contracts. Due to the current cost structure, it is extremely difficult to carry out technical management beyond Germany. Consolidation on the charter side – and negotiating power – and technical management takes place and is the right strategy."

"In Germany, the large and stronger shipping companies will buy the smaller companies to get their hands on existing management contracts. It's about large scale."

Last year, historical German shipping group Rickmers, led by Betram Rickmers, declared bankruptcy, but in a consortium with Zeaborn, Rickmers ended up winning a bidding war for the ship management division in the company.

Other players have also joined forces, such as the company Ahrenkiel Steamship, which was formed several years ago by three ship management companies, including the German branch of Ahrenkiel.

A lot has also happened within charter. In 2017, Peter Döhle merged his charter business with Greek Costamare, while charter collaboration Hanseactic Unity consists of five German companies, including Reederei Nord and Bernhard Schulte.

Things look different on the ownership side, and the question is also what there is to offer. From a financial perspective, just 20 companies are actually interesting, say several market sources. Meanwhile, several banks are turning away from the German cluster and focusing more on international companies.

Like several other banks, HSH Nordbank has struggled for years with the backlog of loans to the KG (limited partnership) sector in the country, where due to the crisis ships have been taken over by banks and sold on, as the KG owners were unable to pay debts or make repayments.

With the upcoming privatization of HSH Nordbank, which signed a deal with several funds in February, a large share of bad loans totaling EUR 4.3 billion to shipping and container vessels in particular were sold onwards to new investors. Allegedly, several KG owners have flown to Hamburg in their private jets to protest the situation.

Others are benefiting from the many vessel sales, such as German investment company MPC Capital, which in conjunction with MPC Container Ships bought over 60 ships this year.

English Edit: Lena Rutkowski

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