UK shipping company put into administration

Coastal Bulk Shipping, based in Rochester, UK, has ceased trading at the end of December 2008. The company operated a fleet of 13 vessels (between 1,200 dwt and 2,250 dwt) and employed 90 sea and shore staff. Its ships operated under the British flag.

Managing Director Tim Lowry cited problems with the non-performance of contracted customers and the weakness of sterling. These difficulties were exacerbated by a reduction in imports (especially fertilisers which farmers were unable to finance due to the contraction of the credit markets) and greater fuel costs.

Coastal Bulk Shipping had for the last four years been successfully executing a revised business plan which led to sustained improved trading, resulting in strong growth up to the economic downturn in the autumn, at which point the company was actively looking at potential for expansion.

Trade fell so significantly in November that the Directors at Coastal Bulk Shipping had no other course of action than to put the company into administration. There is no question that rock bottom pricing by the road haulage industry has been a significant contributory factor, a serious blow to the water-freight sector. Freight by Water in the UK believes this must raise questions about the existence of a fair but competitive playing field within the distribution sector, which is generally the hardest hit after manufacturing as a result of the current economic climate in the UK.

Freight by Water Executive Director Francis Power said: “We are very concerned that the economic downturn is resulting in a situation where cost is disproportionately trumping carbon and congestion as our national priority in the distribution of goods. We don?t want to see a situation developing where we have a dramatic increase in carbon emissions from road freight movements for the sake of marginal cost savings. At some point market conditions will resume to some sort of equilibrium. OPEC has made clear that it also expects to see a return to higher oil prices (it suggests $80 a barrel). When that happens we?ll be back to the wholly unsustainable ways of the past and if we don?t have the water and rail freight industries to offer viable alternatives, we?ll be stuck there. The flexible and efficient services previously offered by Coastal Bulk Shipping will be greatly missed, especially its ability to take freight, including abnormal loads, off the roads. “