Looking ahead

Built upon a culture of family management over four generations, the Kahrs family name looks back on 125 years of experience in the shipping industry since it founded J. Kahrs Bereederung GmbH & Co. Having been onboard ships with his father since he left school, current managing director Captain Jan Kahrs achieved his master’s licence in 1984, before returning to shore in the early 1990s to overtake management of the business.

This heritage is not to say that J. Kahrs has not seen changes in its operations over the years, primarily with regards to vessel financing. Whilst initially the company purchased vessels using its own capital or bank loans, as the price of these units continued to rise and with this the risk involved, J. Kahrs shifted its system to offer its new ships to private shareholders. This model offers the company greater security in times of market difficulty.

At its very beginning J. Kahrs offered general carriage vessels, but during the containerisation boom adapted its vessel designs at the shipyard to deliver a fleet suited to this market. Since then the majority of vessels owned by the business have been container ships, but in the past J. Kahrs has also operated second-hand ships with cranes of 1000 20-foot equivalent unit (TEU) capacity, and smaller vessels of between 180 and 500 TEU.

Today though the fleet consists of five ultra-modern container feeder ships, all of which were built between 2005 and 2007, making them relatively young tonnage in the market. All five vessels have a container capacity of around 800 TEU, and are managed on a financial and technical basis from J. Kahrs’ base in Jork, Germany. In terms of daily activities, J. Kahrs prides itself on ensuring that each of its vessels is well maintained and capable of providing the best possible service to charterers.

“At present all of our vessels are on charter between Baltic ports such as St Petersburg, Kotka and Helsinki, Swedish ports like Stockholm, and the North Sea where we are currently feedering on a door-to-door basis within Ireland and the east cost of the UK. Just recently our final vessel, which was previously employed in the Mediterranean, has been brought over to the North Sea on a new charter that is also going over to St Petersburg. Therefore at this point all five vessels are positioned around the North Sea and the Baltic Sea,” explains Jan.

As a relatively small operator in its own right, J. Kahrs has added extra weight to its offering, as well as many business benefits, as part of joint venture Este Shipmanagement. Back in 2000 J. Kahrs paired up with another ship operator to share costs on employees, stores and other outfitting, as well as pool experience. After six years of successful collaboration, the partners moved to a new office close by to its former location, and in the process acquired a third party.

Therefore in 2007 these three well-experienced operators – J. Kahrs, Bernd Becker Shipmanagement GmbH & Co, and H.H. Shipping GmbH & Co – came together under the name Este Shipmanagement. Each partner has been running their family owned shipping company for many years, and therefore can contribute a wealth of experience. By sharing risks and costs, the businesses are more easily able to cope with the fluctuations of the shipping market, and can draw on one another to provide a full scope of services such as newbuilding supervision and project management, crewing, insurance, chartering, technical management, and financial management. Additionally being part of a larger group gives J. Kahrs greater scope to take advantage of opportunities for future development.

Whilst this approach has stood J. Kahrs in good stead during these more difficult market conditions, with activity volumes potentially looking to remain low this brings with it other concerns. “We saw a small peak in the market in early 2011 but over the rest of the year the market decreased dramatically,” explains Jan.

“We are now in the 2012 winter period but we still see there is a long way to go until the market recovers. Coupled with this at present everyone is looking more closely at the figures and the financial side of things to try and calculate how things will look over the next year or two, and how we can remain on top of our expenses and payment commitments.”

Although J. Kahrs continues to hold ambitions for the company to double in size either by an increase in units or quantities of ships, it’s clear that for now major investments are on the backburner in anticipation of more favourable conditions. In this vein, the business is moving away from new build vessels at present and focusing more on second hand ships if there are good opportunities to be had. Keeping one eye on the sale and purchase market J. Kahrs’ strategy is to retain the same financial model, and look ahead to more stable times where it can bring in new vessels to take advantage of greater business volumes.

Long experience
Family owned structure
Partner in Este Shipmanagement