German Ship Captain Swamped in Debt Underscores Bank Risk

Reality is now coming home in the shipping business. A complete bloodbath is unfolding, one that will tremble throughout the whole supply chain of boat building. Many shipyards will go under as a result of a lost decade of shipping volumes and the advent of a new "silk" road via rail from China to Germany will only cause more hurt to the industry in lowering prices.

The Silk Road will be faster and cheaper reducing the need for ships and offering a faster cash turn around.

With it will go the shipping industry but with it along the route, new cities and industries will emerge. Time to think outside the box, but Germany and Russia will become very big new players now.

Shipping containers and container cranes are seen in the Port of Hamburg. Photographer: Krisztian Bocsi/Bloomberg

By Nicholas Brautlecht
27 April 2014

Reederei Heinrich, a 149-year-old German shipping company, risks losing two of its three vessels unless it repays loans as financial stress in the industry spreads to banks facing a European Central Bank review.

The company, established near Hamburg, Germany’s biggest port, has endured misfortunes such as the death of a family member struck by anchor chains and ships that ran aground. Now General Manager Jens Robrahn says he’s concerned that HSH Nordbank AG may call in 22 million euros ($30 million) of outstanding debt and seize two boats acting as security.

“I currently get 4,000 euros a day for a vessel, which covers operational costs and interest payments, but I don’t have the money to pay back the loan,” Robrahn, 73, a ship captain, said in a phone interview from his office in Jork, 25 kilometers (16 miles) west of Hamburg. Smaller container vessels like his Anna Sirkka and Page Akia need to repay about 1 million euros in debt a year, he said. Robrahn and HSH Nordbank, the world’s largest maritime lender, declined to provide further details.

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