Cho Yang teams up with Iranian carrier despite setback /09 May 2001/

The ailing line has launched its latest fightback in an effort to change its focus from the United States

The South Korean Line is taking space on two services operated by the Islamic Republic of Iran Shipping Lines. An allocation of 50 teu per sailing has been agreed on a weekly service between Europe and the Middle East, plus 100 teu a week on a second service between Asia and the Middle East. There are also plans on the drawing board to launch a new Europe/Asia service later in the year.

The fightback by Cho Yang follows its forced withdrawal last month from the United Alliance because of serious service disruptions. Several Cho Yang ships were detained by creditors as the line's money problems deepened. Indeed, the carrier had to scotch rumours last week that its US regional head office had closed. Staff numbers have been pared down, but the company is still in business, officials emphasised.

Chuck McCann, responsible for the organisation's commercial services, told Lloyd's List that "the company is reorganizing". He added: "The Rutherford office has been reduced substantially, but has a functioning staff attending to the requirements of customers and vendors." Mr McCann admitted there had been service interruptions due to vessel difficulties and ship arrests, but said the company had every intention of staying in business in the United States.

Neither does Cho Yang plan to become a non-vessel operating common carrier, as was being rumoured, and which under US law would prevent the line from offering service contracts. "We have every intention of maintaining our services as a vessel operating carrier," said Mr Mc Cann. The Federal Maritime Commission confirmed that to date it had not received any information to the contrary. Mr Mc Cann said the company's point of focus in future would be its Asian business with the US and its Asia trade with Europe, as well as its large intra-Asia trades. "The continuity of trade through the Suez (Canal) to the US east coast will be maintained," he went on to point out.

However, Cho Yang is pulling out of the All Water Pendulum between Asia, the US and northern Europe which transits the Panama canal. Cho Yang had run into trouble in the US because of the need for a complex and extensive intermodal transport structure to accomodate the vast scale of the country. "Cho Yang's logistics became very diverse and thus very complicated to manage," explained Mr McCann. He expects the organisation to limit the scope of logistics services in the future to simplify its management structure.

The new arrangement with Iran Shipping Lines involves nine ships of 3,300 teu, of which five are deployed in the Pacific Container Line service calling at Shanghai, Inchon, Pusan, Kaoshiung, Hong Kong, Singapore, Port Kelang and Dubai. Another four ships are in the Europe Container Line rotation between Felixstowe, Antwerp, Hamburg, Naples, Jeddah and Dubai.

Cho Yang's participation is scheduled to start towards the end of this month.

The two lines are also in discussions about an eight-ship service linking Asia, the Middle East and Europe to start by October, with Cho Yang planning to deploy one its own ships in the eight vessel rotations.

Source: LLoyd's List, Dee Rissik and Janet Porter