Grand China Logistics resumes payment to shipping firm Vafias Group
Grand China Logistics, a unit of conglomerate HNA Group, has resumed payments to shipping firm Vafias Group, after the Greece-based company took legal action and briefly seized one of its vessels, Vafias managing director told Reuters.
Grand China paid around US$2 million to the Vafias family shipping group this week to cover outstanding bills for the use of the Vafias-owned vessel, GCL Argentina. The vessel is on contract with Grand China till October 2015.
The sister company of China's Hainan Airlines has halted or delayed payments to several foreign shipowners since at least May, making it the second major Chinese shipping firm to take such action this year due to a severe downturn in the freight market.
"We won victory. The problem is resolved for now, but with these people you never know," said the Athens-based executive, Harry Vafias, in a telephone interview.
"It is a pity for them. By this behaviour, they ended up paying more money than they owed, and ruined their name at the same time."
Grand China officials were not immediately available for comment. Last month, a company official said it was common for businesses to delay payments in a difficult market.
Norwegian firms Golden Ocean and Spar Shipping, along with Greece-based Minerva Marine have also had difficulty securing payments from Grand China this year.
China's transportation minister last month said the global shipping sector was in a downturn worse than during the 2008 financial crisis, with the outlook for the industry made increasingly uncertain by the euro zone debt turmoil.
Chinese shipping firms have been particularly hard hit after rapidly expanding their fleet in the last few years, only to see their investments turn sour by oversupply and tumbling freight rates.
The Baltic Exchange's Dry Bulk Index, benchmark for the freight industry, has fallen more than 50 percent over the last two years.
China's top shipping conglomerate, Cosco Group , was the first domestic firm this year to announce that it had briefly halted payments to foreign shipowners, so it could renegotiate better terms.
Vafias Group, which has a fleet of 65 ships, started to receive delayed payments from Grand China in May for its $20,000 a day capesize dry bulk carrier, typically used to transport iron ore and coal.
Payments came to a halt in September, forcing the Greek company to take legal action in the United States and to impound one of Shanghai-based Grand China's container vessels, Vafias said.
The Greek company does not intend to expand its fleet of 40 gas carriers, 22 oil tankers and three dry bulkers next year due to the difficult freight market.
Grand China paid around US$2 million to the Vafias family shipping group this week to cover outstanding bills for the use of the Vafias-owned vessel, GCL Argentina. The vessel is on contract with Grand China till October 2015.
The sister company of China's Hainan Airlines has halted or delayed payments to several foreign shipowners since at least May, making it the second major Chinese shipping firm to take such action this year due to a severe downturn in the freight market.
"We won victory. The problem is resolved for now, but with these people you never know," said the Athens-based executive, Harry Vafias, in a telephone interview.
"It is a pity for them. By this behaviour, they ended up paying more money than they owed, and ruined their name at the same time."
Grand China officials were not immediately available for comment. Last month, a company official said it was common for businesses to delay payments in a difficult market.
Norwegian firms Golden Ocean and Spar Shipping, along with Greece-based Minerva Marine have also had difficulty securing payments from Grand China this year.
China's transportation minister last month said the global shipping sector was in a downturn worse than during the 2008 financial crisis, with the outlook for the industry made increasingly uncertain by the euro zone debt turmoil.
Chinese shipping firms have been particularly hard hit after rapidly expanding their fleet in the last few years, only to see their investments turn sour by oversupply and tumbling freight rates.
The Baltic Exchange's Dry Bulk Index, benchmark for the freight industry, has fallen more than 50 percent over the last two years.
China's top shipping conglomerate, Cosco Group , was the first domestic firm this year to announce that it had briefly halted payments to foreign shipowners, so it could renegotiate better terms.
Vafias Group, which has a fleet of 65 ships, started to receive delayed payments from Grand China in May for its $20,000 a day capesize dry bulk carrier, typically used to transport iron ore and coal.
Payments came to a halt in September, forcing the Greek company to take legal action in the United States and to impound one of Shanghai-based Grand China's container vessels, Vafias said.
The Greek company does not intend to expand its fleet of 40 gas carriers, 22 oil tankers and three dry bulkers next year due to the difficult freight market.
