Baltic Exchange Members ‘Raised Concerns’ Over Cosco Charters
The Baltic Exchange, the world’s biggest shipping bourse, said some members “raised concerns” over allegations that China Cosco Holdings Co. failed to make charter payments for vessels it hired.
The concerns will be reviewed by the membership committee when it meets in the next several weeks, Jeremy Penn, chief executive of the exchange, said by phone today. Any behavior deemed unethical can lead to membership being suspended or canceled, Penn said, referring to the general procedures rather than the specific concerns raised about Cosco.
A spokesman for Cosco, who asked not to be named in line with corporate policy, declined to comment. In an Aug. 16 statement, the company said involving the media “may potentially further complicate the existing situations.”
Cosco, the world’s third-biggest owner of dry bulk commodities vessels, had at least three ships arrested in the past two months as owners sought late charter payments, according to legal filings in the U.S. and Singapore. In each case, Tianjin, China-based Cosco was locked into long-term contracts at rates higher than market prices.
The London-based exchange has 593 global members and publishes daily rates for more than 50 maritime routes. The last company to be suspended by the Baltic Exchange was Perth-based Fortescue Metals Group Ltd. in 2009.
Cosco owned 24.8 million deadweight tons of dry bulk ships in April, ranking it third globally behind Nippon Yusen K.K. and Mitsui O.S.K. Lines, according to data on the website of Mitsui. Cosco also had an additional 222 ships on charter as of Dec. 31, according to its annual report.
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