Cargill said Thursday it's closing its London ocean transportation office because of historically bleak conditions in the global shipping business.
Minnetonka-based Cargill, which has long had a large ocean shipping business, said the London office, which employs 10, will be consolidated with Cargill's freight operations in Geneva, Switzerland. Cargill has had a shipping office in London, one of the world's historic shipping hubs, since the late 1950s.
Cargill said in a statement the ocean freight market "is in its most distressed position since the mid-1980s, a situation that looks likely to continue for the foreseeable future."
Cargill is one of the world's largest vessel charters, and a few hundred of its bulk carriers are sailing worldwide at any given time. But ocean freight rates are at rock bottom with no relief in sight, and Cargill is looking to cut costs in response.
"This has been a difficult decision, given the track record of our London office, which has played a very important role over the years, particularly in developing our relationship with the ship-owning community in the London market," Roger Janson, head of Cargill's ocean transportation, said in the statement. "It has also served as an important talent pipeline, with many of our global employees having been hired in London."
Still, he said the move to Geneva makes sense given improvements in global communications technology along with Cargill's continued good relations with ship owners.