CP Ships will withdraw from slot charter

CP Ships Ltd has given notice to withdraw from its slot charter agreement with CMA CGM in the Asia-Europe trades effective in early March 2003.

Under the agreement, two CP Ships brands, Contship Containerlines and Lykes Lines, offer services in the Asia-North Europe and Asia-Mediterranean trades. Neither brand deploys its own ships in these trades.

“After nearly two years in Asia-Europe it has become clear that being a relatively small newcomer in a large, highly competitive market and doing so using a ship network we do not manage ourselves is not a profitable long-term business model,” said Ray Miles, chief executive officer of CP Ships.

“We entered the trade just as it took a downturn, which made for a difficult start,” said Miles. “And despite recent signs of freight rate improvement, we do not anticipate a substantial enough recovery to justify continuation of the slot charter. However, we are reviewing options to provide other services in these and related trades in a way which gives us greater control over costs and service.”

CP Ships began the slot charter in March 2001.