K-Line has announced it is scrapping six of its car carriers and returning another 11 to their owners bringing the fleet to 74 at the end of March next year – the lowest number for six years.
The company is looking at what it terms a “structural change in demand rather than a cyclical dip” as the global drop in demand for new vehicles hits logistics providers.
The company is expected to carry around 500,000 fewer cars this fiscal year, 17% less than the last one, Eiichi Murakami, Head of Car Carriers, told Bloomberg.
K-Line had announced in January that it was scrapping five ships by the end of fiscal year 2008 following Japan’s other two carriers NYK and MOL which said they would be scrapping 15 vessels each within the same timeframe. NYK has also said it may scrap as many as 10 more vessels by September 2009.
Japan exported 64% fewer vehicles in February, the biggest drop since records began being taken by the country’s Automobile Manufacturers Association.
K-Line had 81 car carriers operating in its fleet last month and is the world’s fourth largest operator for vehicle transport.
Despite the action announced this week it will still take delivery of 10 new car carriers this fiscal year.
Read more about carrier action here: Low volumes mean idle fleets