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 Post subject: Re: GLF update?
Unread postPosted: September 28, 2021, 1:05 pm 

Joined: July 2, 2010, 1:36 pm
Posts: 756
Jon Paul wrote:

I highly doubt Cliffs would be interested in the GLF fleet.


The Gott, with its extra-long self-unloading boom, relatively new engines, and reportedly extra robust construction, could possibly be an appealing iron ore pellet carrier for Cliffs. The Munson has the advantage of a forward-mounted boom, new engines, relatively high cubic capacity for a ship its size, and just had its unloading tower rebuilt from a bucket elevator system to a loop belt system.

As you said, seems unlikely Cliffs would be particularly interested in much of the rest of the GLF fleet unless they were looking at the big-picture advantages of owning an entire fleet of ships. In that case they'd have to be willing to make long-term investments in those ships and be willing to wait patiently before those investments started paying for themselves as the company reaped the benefits of controlling one's own raw materials transportation costs.

If Cliffs wanted to do such a thing with the GLF ships, it would likely have to be looking at re-powering all of the remaining ships besides Gott and Munson, and either making sure the unloading shuttles on the Speer and Blough match up with the receiving hopper at Burns Harbor, Indiana, or at least putting a conventional slewing unloading boom on the Speer.

Highly unlikely but interesting to imagine what the Munson or Blough or even the Gottwould look like in the CML / ex-Inland Steel colors scheme.


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 Post subject: Re: GLF update?
Unread postPosted: September 28, 2021, 9:15 am 

Joined: December 14, 2017, 8:37 pm
Posts: 740
Andrew wrote:
If that's the case, and not a rumor (I'm not doubting what you heard or the person you heard it from, just always cautious about this stuff), there's really one of four outcomes. One, GLF tries to run independent of CN as a 'new' company, which is unlikely, two, Algoma, three, Rand, or four, Cliffs. I'm really hoping for Cliffs. Honestly, I think the chances are pretty high.


I highly doubt Cliffs would be interested in the GLF fleet. Interlake covers AK/Dearborn, VTB is servicing Torco and Ironville and Cleveland bulk terminal and ASC footers service Indiana Harbor and that area.
If anything I would suspect that down the road Cliffs would pick up some of the ASC footers if the price was right. They would be able to service Indiana Harbor, Burns Harbor, Toledo Torco and Cleveland Bulk Terminal but I only see that if the Rand situation unravels and Cliffs wants the stability of having better control.


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 Post subject: Re: GLF update?
Unread postPosted: September 28, 2021, 8:11 am 
I wonder if the fleet could possibly be split up? If that's the case, I see Interlake picking up the Great Republic and at least a couple of the AAAs.


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 Post subject: Re: GLF update?
Unread postPosted: September 28, 2021, 8:07 am 
If that's the case, and not a rumor (I'm not doubting what you heard or the person you heard it from, just always cautious about this stuff), there's really one of four outcomes. One, GLF tries to run independent of CN as a 'new' company, which is unlikely, two, Algoma, three, Rand, or four, Cliffs. I'm really hoping for Cliffs. Honestly, I think the chances are pretty high.


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Unread postPosted: September 27, 2021, 9:17 pm 
I was told today, that the Captains of the fleet boats were notified that the fleet is for sale.


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 Post subject: Re: GLF update?
Unread postPosted: September 23, 2021, 12:05 pm 

Joined: July 2, 2010, 1:36 pm
Posts: 756
Guest wrote:
Jared wrote:
Would/ could the lake boats service these new mini-mills?


That said, the new Cliffs facility in Toledo exists to produce HBI for mini mill applications. It seems likely that as ore cargo demand falls at integrated mills, it will rise at current and future HBI facilities.


Well said. A company called Petmin has the permitting to construct and operate a new pig iron plant on the waterfront at Ashtabula, Ohio, and did some preliminary construction work for it last winter. Construction was suspended in spring 2021 (if memory serves) as the company cited supply chain and other logistical issues tied to the pandemic, and stated that it hoped to resume construction in autumn 2021. Doesn't seem like that has happened yet, but if this plant does get built, it's likely to commence production in 2023 or maybe 2024 and would likely source some or all of its raw materials via ship. Plant is slated to produce something like 400,000 tons per year of nodular pig iron, a niche product used in the casting industry to make ductile iron.

If the waterfront placement model of the Toledo and/or Ashtabula iron plants prove successful, it's possible that more such capacity could be built around the Great Lakes in the future, as the poster above mentioned. This would provide demand for a small or medium volume of tonnage that could soften the blow felt by Great Lakes shipping companies due to declining integrated steel mill / blast furnace demand.


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 Post subject: Re: GLF update?
Unread postPosted: September 22, 2021, 11:33 pm 
Jared wrote:
Would/ could the lake boats service these new mini-mills?


Yes and no. The pellets and limestone shipped to integrated mills are of no direct use to mini mills, which use an electric arc to melt scrap. The ongoing transition of mini mills will continue to reduce shipping demand.

That said, the new Cliffs facility in Toledo exists to produce HBI for mini mill applications. It seems likely that as ore cargo demand falls at integrated mills, it will rise at current and future HBI facilities.


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 Post subject: Re: GLF update?
Unread postPosted: September 22, 2021, 5:37 pm 

Joined: December 6, 2014, 4:51 pm
Posts: 642
Would/ could the lake boats service these new mini-mills?


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 Post subject: Re: GLF update?
Unread postPosted: September 22, 2021, 3:33 pm 
One thing being left out of this discussion is how none of the integrated steel mills are doing any capital investments into their facilities; i.e., by building new blast furnaces or even talk of building a new mill. Yet, their biggest competitors, the mini-mills, are investing large sums of money to expand their EAF and hot-rolled capacity and in fact are adding nearly 18 million tons of additional capacity by 2022 in the US, either by expansion or building new greenfield plants.

When CN Rail purchased GLF in 2003, which came with the purchase of DMIR (which the railroad purchased so they could connect to the Wisconsin Central), I was surprised that the railroad at that time didn't sell the fleet to another company. Since demand for lake shipping was increasing up until September 2008 when the bubble burst in the world economy, CN Rail possibly could have made a handsome profit with GLF's sale.

I read that Bill Gates, one of the founders of Microsoft, is the largest single shareholder of CN Rail, with a 10% interest through Cascade Investment and Bill and Melinda Gates Foundation.

- Brian


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 Post subject: Re: GLF update?
Unread postPosted: September 22, 2021, 10:32 am 

Joined: November 8, 2012, 1:07 pm
Posts: 149
I hope Cliffs pulls this off. I think it would solidify the lakes shipping industry.


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 Post subject: Re: GLF update?
Unread postPosted: September 22, 2021, 8:08 am 
If GLF exits the scene, I'm willing to bet CML/Cliffs or Interlake would pick up the majority of the fleet.

There has been talk of Cliffs trying to get back into the shipping scene so that they can control the iron production in its entirety, and I know there have been rumblings of Rand selling off the footers to a company like CML/Cliffs. If Cliffs could combine CML, GLF, and the Rand footers, they would be in a spot where they would have pretty much a monopoly on their iron production.


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 Post subject: Re: GLF update?
Unread postPosted: September 21, 2021, 8:40 pm 
Not mentioned that I've seen is the recent attack on current Canadian National management in the wake of their failure to merge with Kansas City Southern.

TCI Fund, the 2nd biggest investment group that owns a significant percentage of CN stock, is unhappy with the road's financial performance and wants the operating ratio (The % of each dollar of revenue that had to be spent to earn that dollar) slashed to temporarily drive up share price while having their own board, CEO, and chairmen installed in place of current management.

Canadian National as a result in a bid by current management to retain control, has announced a big plan to lower the operating ratio that involves cutting way back on capital spending (i.e., deferred maintenance will be the name of the game), share buybacks, and a review of all non-rail businesses. Those businesses, including Great Lakes Fleet, will be reviewed with an eye towards either improving their operating ratio or selling them off.

Not good for Canadian National. The operating ratio has lagged not because of problems, but because they've been growing and busy looking not to the next quarter but to 5-10 years down the road with their strategic planning and investments that often involve projects that raise the operating ratio but promise to offer a lot of value to stakeholders in the longer term.

So perhaps all this speculation will be for naught since it's not difficult to envision this fleet being sold in the not too distant future (They're aiming to bring down last year's 65.4% OR down to 57% next year, so unless GLF brings in say more than 45 cents or so in profit for each dollar it costs to operate, CN will likely want out).

A potential suitor like Interlake likely is going to have significantly different ideas on how to move forward than current management, and the future of some of these vessels may be significantly different if some big ownership changes come to pass.

And if GLF does stay under CN control, it makes it even more difficult to envision major investments in their idled vessels. Not only do they need contracts in place to keep a reactivated ship busy while yielding a profit, but unless that profit is a high enough percentage to maintain or improve corporate's operating ratio, it's going to be seen as undesirable and be avoided entirely. All thanks to shortsighted activists investment funds that do these slash and burn tactics to artificially inflate share value temporarily and then sell their stake before the negative impact of their tactics strikes and the value of their stake plummets as things like deferred maintenance on track start causing derailments left and right.


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 Post subject: Re: GLF update?
Unread postPosted: September 21, 2021, 8:33 am 
Azcon doesn't probably have the space either. I would expect Port Colborne. If they can take the St. Clair and Arthur B. Homer, they should be able to do the Blough too.


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 Post subject: Re: GLF update?
Unread postPosted: September 20, 2021, 10:29 pm 
So if and when the blough goes to scrap where would this take place? Don’t know if it would fit at port colborne, so could they possibly scrap her at azcon in Duluth?


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 Post subject: Re: GLF update?
Unread postPosted: September 20, 2021, 6:45 pm 
While I agree with you the Anderson was in rough shape, I think a lot of us underestimate the AAA class. Despite the fact they were built in 1952, their hulls have held up remarkably, and one might argue that they simply built better ships back then. Granted, there are cargo hold issues, but those are things that cost less than a completely new hull. They also are probably the money makers of the fleet, since they backhaul stone. Their size is perfect, and the upgrades they have received over the years have kept them in good shape. They seem, for the most part, to be kept up well, although I don't know how CN does compared to USS. Regardless of condition, they're good to save for a rainy day.

With power plant upgrades to many of the older ships in the great lakes fleet (Interlake, CML, Munson), I think the hulls are in good enough shape to last 100 years and the owners seem to agree. In her current state, I'd argue the Anderson is in better shape than a good chunk of the great lakes fleet and could conceivably last to see a centennial.

What I don't understand, and maybe someone can answer, is if the Callaway was put into long term layup, why didn't CN put her at the wall at North 6 in Duluth? That way they don't have to pay dock space.


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