Vessel sales pre-2000s

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Guest

Re: Vessel sales pre-2000s

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Buying new wasn't so cost prohibitive in the old days.

A fleet that had a solid contract and needed the capacity to meet it, was going to fulfill it one way or another. So if you had excess capacity of your own that you didn't foresee needing again or had replaced with a more modern vessel, and the other party was willing to pay more than salvage value for your excess asset, you had nothing to lose by selling.

Now it's a major hurdle to line up a new or second hand hull, especially on the US side now that Canadian fleets are able to import without heavy fees which again makes new construction semi-reasonable. So if you're not willing to play ball with another fleet, there's no relatively easy way on the US side to develop that capacity.

And most fleets buying second hand operated on the fringes of the industry in the past. Lower Lakes Shipping, although seemingly struggling a bit in recent times, showed everyone that another man's scrap could be turned into a viable long-term competitor against the fleet that disposed of the vessel.

You see this a bit elsewhere, too. BHP Billiton for instance in Australia wasn't willing to sell their late model AC6000CW locomotives, recently repowered with reliable power plants to replace the original and flawed GE HDL engines, to another Australian operator upon their replacement with new EMD's.

It was either export or scrap, and since no US railroad like CSX was interested in returning these to North America, these locomotives from 1999 got cut up back in 2014 after less than a decade of use on their new GEVO engines. I'm no expert on the Aussie rail scene, but the only explanation is that BHP didn't want the locomotives to benefit a direct competitor, since they had a lot of life left in them (They weren't worn out; BHP wanted to standardize on SD70ACe's).
Guest

Re: Vessel sales pre-2000s

Unread post by Guest »

You will probably find in P&H case that they probably had contracts to offer CSL and Algoma either pre existing or new which was probably part of the deal.
Guest

Vessel sales pre-2000s

Unread post by Guest »

I find it interesting when reviewing the histories of some ships as to how in the past several passed through many different fleets during their careers. I realize that a lot of this took place through fleet acquisitions and some going defunct with their ships becoming available for sale. In addition, some fleets such as USS were not necessarily concerned with outside competition with their vertical integration models. But it seems that since the 2000s, likely due to the dwindling number of fleets and business conditions, that fleets have a tendency to scrap their vessels rather than sell them to other operators such as the dismantling of the James Norris and American Fortitude which, from what has been said, had the potential to be acquired for further use. I remember in the late 1980s and early 1990s when the CSL sold the T. R. McLagan and Algoma sold the Algocape to P&H. Such a transaction would be unlikely to take place today. I guess it boils down to that there is such a limited amount of business that shipping companies cannot allow ships with any service life remaining fall into the hands of a competitor.
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