by Guest » March 9, 2022, 4:29 pm
Darryl wrote:Not a bad thought. On CNBC today, they said Cliffs has lots of money. The idea's been floated on here that maybe they're interested in having a bigger, dedicated fleet on the Lakes. USS's got to be at least be thinking along those lines, too. If a footer stayed at the Wall in the Spring, that would not indicate a rush to be scrapped. Boats stay laid-up for years.
This whole thing in Ukraine according to what I've read recently will affect other commodities besides oil. Steel is shipped out of Eastern Bloc countries to Western Europe. That's changed for the time being. Consequently, this report went on to say, less steel will cross the Atlantic Ocean. Lot of uncontrollable factors in this particular global market.
I don't know how the idea of Cliffs jumping back into the lake shipping business is getting a life of its own on these boards other than a few posts about the possibility. Is it possible? Yes, anything is. Is it likely? Probably not. Cliffs will most likely continue to outsource this part of their operation to a third party as it does today. That way they are free from all of the problems connected with operating a fleet of ships not to mention the labor issues. Vertical integration in the steel / raw material industries has been tried before when it comes to fleet ownership and no such fleet remains on the lakes. Even after the dust settles on current events in Europe, I don't believe the business climate will change to the point that Cliffs will change its business model concerning the movement of its raw materials. It would seem that one of the primary reasons steel companies owned their own fleets at one time was not only to ensure a steady supply of raw materials to their steelmaking operations but also to have a bargaining chip in negotiating ore hauling contracts. Other than United States Steel, I doubt that there has ever been a steelmaker that had a fleet large enough to cover all of its needs at least since the end of the Second World War. The only real possibility I can see in which Cliffs would reenter the shipping business would be if the number of independent fleets dropped to a point in which there was no more direct competition to control freight rates. The US Great Lakes shipping industry may in fact be reaching this point even as I type this. I could very well be wrong but I expect Cliffs to continue outsourcing its raw material hauling needs. The continuing decline in cargoes and available vessels may one day change the entire scope of US-flagged shipping on the lakes. It seems that the next few years will be very telling as to what the future holds for shipping on the Great Lakes. One thing that seems sure, however, is that the size of the fleet will continue to decline.
[quote="Darryl"]Not a bad thought. On CNBC today, they said Cliffs has lots of money. The idea's been floated on here that maybe they're interested in having a bigger, dedicated fleet on the Lakes. USS's got to be at least be thinking along those lines, too. If a footer stayed at the Wall in the Spring, that would not indicate a rush to be scrapped. Boats stay laid-up for years.
This whole thing in Ukraine according to what I've read recently will affect other commodities besides oil. Steel is shipped out of Eastern Bloc countries to Western Europe. That's changed for the time being. Consequently, this report went on to say, less steel will cross the Atlantic Ocean. Lot of uncontrollable factors in this particular global market.[/quote]
I don't know how the idea of Cliffs jumping back into the lake shipping business is getting a life of its own on these boards other than a few posts about the possibility. Is it possible? Yes, anything is. Is it likely? Probably not. Cliffs will most likely continue to outsource this part of their operation to a third party as it does today. That way they are free from all of the problems connected with operating a fleet of ships not to mention the labor issues. Vertical integration in the steel / raw material industries has been tried before when it comes to fleet ownership and no such fleet remains on the lakes. Even after the dust settles on current events in Europe, I don't believe the business climate will change to the point that Cliffs will change its business model concerning the movement of its raw materials. It would seem that one of the primary reasons steel companies owned their own fleets at one time was not only to ensure a steady supply of raw materials to their steelmaking operations but also to have a bargaining chip in negotiating ore hauling contracts. Other than United States Steel, I doubt that there has ever been a steelmaker that had a fleet large enough to cover all of its needs at least since the end of the Second World War. The only real possibility I can see in which Cliffs would reenter the shipping business would be if the number of independent fleets dropped to a point in which there was no more direct competition to control freight rates. The US Great Lakes shipping industry may in fact be reaching this point even as I type this. I could very well be wrong but I expect Cliffs to continue outsourcing its raw material hauling needs. The continuing decline in cargoes and available vessels may one day change the entire scope of US-flagged shipping on the lakes. It seems that the next few years will be very telling as to what the future holds for shipping on the Great Lakes. One thing that seems sure, however, is that the size of the fleet will continue to decline.