When financial storm sends hundreds of people out of work

For the managing director of cargo handling and storage service provider Socep Constanta (SOCP), Cristian Ianca, the industry faced the first wave of financial crisis in November. Since then, the layoff snowball started to pick up speed inside the company, in the midst of stormy times.

Crisis waves sparked in November

The cargo handling provider Socep Constanta is running a company-wide re-engineering program to address activity and staff, following major reduction in cargo and withdrawal of its biggest client. Managing director of Socep Constanta told Wall-Street what are the prospects of the company in the context of a 20% traffic and a headcount cut to half.

The cargo handling provider recorded in 2008 marked a profit of 7.61 million lei (2.07 million euros), the highest in the past years. However, over the past two months, the financial crisis has taken its toll on the volume of maritime and inland water transport.

“We started to feel the pinch of financial crisis in late November –early December. The traffic reduced in the two activity sectors container terminal and general commodities. In January-February, the activity contracted by 50%, while in March-April, the volume of water transport shrank to a staggering 20% of its capacity”, said Cristian Ianca.

However the company took a new blow later in May. The biggest clients of its storage division – CMA CGM – has removed BEX (Bosphorus Express) shipping line from Asia and Black Sea, and as of July, Socep’s managing director said the terminal’s activity could be mothballed.

CMA CGM and Maerks line have pooled their resources for a shipping line in Asia-Black Sea in May, through which the transport is made on 9,500 TEU vessels, capacity that exceeds restrictions imposed to Socep.

“We are talking with other clients for the container terminal, but for the moment, the activity in this sector is idle”, Ianca added.

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