Color Line streamlines operations on two routes
As a result of rising fuel costs, macroeconomic uncertainty and weakened framework conditions, Color Line has decided to end the operation of Color Viking on the Sandefjord-Strømstad route and the cargo ship Color Carrier on the Oslo-Kiel route.
The company will seek to minimise the number of redundancies through redeployment to other ships in the fleet and by offering voluntary schemes.
‘Color Viking has run a year-round, daily route between Norway and Sweden for more than 20 years, but due to high energy costs and weakened framework conditions, it is unfortunately no longer financially sustainable to operate this ship on the route,’ says CEO Trond Kleivdal.
Significant increases in the costs of fuel, shore power and commodity costs have had an impact, while at the same time important framework conditions have been weakened.
This particularly applies to the subsidy scheme for Norwegian seafarers, and in the proposal for the national budget for 2023, a further weakening of the scheme is proposed.
In addition, the government proposes to further reduce the scope of the tax-free scheme, this time by halving the tax-free quota on tobacco for residents of Norway.
Color Line will also end the operation of the freighter Color Carrier, which was deployed on the route between Oslo and Kiel in 2019.
The operation is no longer commercially sustainable as a result of sharply increasing costs for fuel and increased crew costs due to weakened framework conditions. This in combination with falling economic and industrial activity in Europe.
‘These are demanding but necessary streamlining decisions. We are now embarking on a process with the aim of minimizing the number of redundancies, including through redeployment to other ships in the fleet as well as the offer of voluntary schemes,’ says Kleivdal.
Color Viking will continue to operate on a normal route up to and including 20 November, while Color Carrier will operate up to and including 14 November.
Color Line will continue to operate the route between Sandefjord and Strømstad with the world’s largest plug-in hybrid ship Color Hybrid, which has shown good development this year.
On the Oslo-Kiel route, Color Line will continue the offer for freight transport with the sister ships Color Fantasy and Color Magic, which are also in a positive trend with a good transport balance.
Both Color Viking and Color Carrier have undergone upgrades in recent years, and the ships will be put up for sale in the global market. The measures are expected to improve operating profit by around NOK 50 million in 2023 compared to the current year.
Report by David Fairclough, photo by Trygve Eriksen
