NYK cuts ship spending

Japan?s NYK Line plans to cuts back on spending for new ships by about 15% for three years in response to the sharply deteriorating global shipping market. The largest Japanese shipping firm by sales previously planned to invest an average of a little over 400 billion yen ($4.52 billion) annually and a total of between 1.2-3 trillion yen ($13.56-14.69 billion) between fiscal 2009 which starts in April and 2011, to expand its fleet, said a company spokesman. The reductions total 150-200 billion yen ($1.69- 2.26 billion).

The spending includes both the cost of building new self-owned ships and charter fees for vessels paid to other shipowners. At present, NYK Line’s fleet numbers about 800 ships, a little over half of which are chartered. The company has yet to decide the number and types of ships to be cut out of its procurement plan, the spokesman said. He said that the company is reviewing the fiscal 2009-11 procurement plan in parallel with a review of the current medium-term management plan.

The current three-year management plan, dubbed New Horizon 2010, was announced in March. It will run from fiscal 2008 through fiscal 2010. NYK Line will release the revised management plan by the end of next March.