Chiquita Brands International, the parent company of Great White Fleet, said as it reported its second quarter results on Thursday that reconfiguration of its European shipping system, initiated in the third quarter of 2011, provided more than $12 million in annualized cost savings, net of transition costs which included expected losses on vessels that were removed from service in 2011 and 2012.
Those sublease losses will not recur this year since
primary leases for vessels expiring at the end of 2012 were not renewed.
Chiquita said in its annual report for 2012 that the new European shipping configuration implemented in late 2011 partially offset other increases in logistics costs. The new configuration involves shipment of part of the company's core volume in container equipment on board other company's container ships. It said that hired container capacity is more flexible than leasing entire ships and is expected to particularly benefit Chiquita in the second half of the year when volume is typically lower.
In its annual report Chiquita said as a result of the shipping reconfiguration, five chartered cargo ships were subleased to third parties until the end of 2012, and eight ship charters were not renewed for 2013. - Chris Dupin