CHARLOTTE, N.C., March 17 /PRNewswire-FirstCall/ -- The leading American domestic ocean carrier, Horizon Lines, Inc. (NYSE: HRZ) announced today it reached an agreement in principle to charter five new U.S. flag, foreign built vessels for 12 year terms from Ship Finance International Limited (NYSE: SFL).
The five vessels will be of a proven, international design and will each carry 2,800 twenty-foot equivalent containers and have 23-knot service speed.
The five new vessels will be deployed in Horizon Lines' weekly service linking the U.S. West Coast with Guam and Asia, upgrading the current "TP1" service that is being served with five Jones Act-qualified vessels today.
The Jones Act covers ocean cargo services to and from Puerto Rico, Hawaii and Alaska, as well as cargo moving between other U.S. origin and destination ports, ensuring those cargoes are carried on U.S.-flag, U.S.-built and U.S.- manned vessels.
Charles G. (Chuck) Raymond, Horizon Lines' CEO and President, said, "As we embark on our fleet enhancement strategy, this is a proud and historic day for Horizon Lines."
"The enhanced service will provide us with additional space and faster transit time between the U.S. West Coast and Guam, as well as the return voyage from Asia to the U.S. West Coast."
Redeploying the carrier's Jones Act vessels from the TP1 service to Hawaii and Puerto Rico will provide additional capacity and service scope to better meet the future needs of Horizon Lines' customers well into the future. The introduction of this new tonnage also allows the carrier's Jones Act vessels to be used as reserve capacity to meet seasonal and dry-dock needs, as well as to respond to potential new opportunities such as coastwise container services.
"Horizon Lines is focused on using capital efficient methods to enhance our service capabilities in our Jones Act markets while at the same time upgrading our service to Guam and Asia with assets that are more appropriate for those trades. This initiative is consistent with our tested strategy of obtaining new tonnage at appropriate costs for the trades we serve," Mr. Raymond said.
The five new vessels are anticipated to be deployed commencing in early 2007. As of July 2007, Horizon Lines plans to operate 17 active ships and to have four vessels in reserve status. The average age of the company's active vessel fleet will be 20 years at that time, an industry standard.
Ship Finance's agreement in principle to charter the five new vessels to the Company is subject to certain specified closing conditions.
This press release includes "forward-looking statements," as defined by federal securities laws, with respect to financial condition, results of operations and business. All forward-looking statements involve risk and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results. We undertake no obligation and specifically decline any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Horizon Lines:
Horizon Lines, LLC is the nation's leading Jones Act container shipping and integrated logistics company, operating 16 U.S.-flag vessels on routes linking the continental United States with Alaska, Hawaii, Guam, and Puerto Rico. Horizon Lines also owns Horizon Services Group, an organization with a diversified offering of cargo management and tracking services being marketed to shippers, carriers, and other supply chain participants. Horizon Lines, LLC and Horizon Services Group are wholly owned subsidiaries of Horizon Lines, Inc., which trades on the New York Stock Exchange under the ticker symbol HRZ.