by Andrew » October 16, 2022, 1:54 pm
Age catches up to every ship, but the upkeep determines the length of their lives. The Interlake ships are better kept than the GLF AAAs and thus have not had issues like this. What's the determining factor is the short-term gains vs the long-range gains mentalities. The Callaway is the last of the three AAAs to have hull issues. The Anderson had them back in 2017, the Clarke had them before (she sat idle for a few consecutive seasons if I recall correctly), and now the Callaway. I wouldn't say it's an issue specific to the Callaway. The current economic situation, and the fact that the AAAs seem to be in a 2/3 rotation and have been for some time, have people speculating at what point the GLF might be looking at dumping one. Since she's the one in need of repairs now, Callaway might be the unfortunate candidate, but it could have been any of the three. 5 years ago, it would have been the Anderson, 10 years ago, it would have been the Clarke. As people have said in other threads, though, the future of shipping looks to be more in the area of smaller, more versatile ships, and it may be that the owners see value in that. Another factor is if GLF sells and who the buyer is.
My best hunch, and it's only a hunch, is that GLF will buy outright from CN in several seasons. I believe CN put the fleet on the table at the beginning of the year in the face of strong commodity prices in hopes they could get a good price. At least one bid was made (I'm guessing from Algoma), but it was well shy of the price they were hoping to get. In the meantime, GLF is saving capital to purchase the fleet. There's a good chance the Blough and Callaway will sit until then, and CN will likely pocket the insurance claim from the Blough. The new owners will then have to dispose of them as they see fit. Chances are the two ships will come as part of the package, and a good chance at that point that GLF may evaluate the long-term plans for their fleet. To stay competitive with Interlake and ASC, they may see fit to hold on to one or both of them.
I do see the AAAs getting repowered at some point, and it may be in a looming recession that the price for that might be reasonable. Right now, the demand and inflation are too high. They're good ships and the hulls had major work done a few seasons ago (except the Callaway).
Long story short, I see the Callaway as a likely candidate for surviving, and the Blough as the unlucky recipient of a perfect storm of circumstances. I think a lot of people saw the Anderson and Clarke as scrap candidates when they had issues but the owners did the necessary repairs. The AAA class has proven it was well built and very versatile, and to rebuild that tonnage would cost way more than fixing the ballast tanks.
Age catches up to every ship, but the upkeep determines the length of their lives. The Interlake ships are better kept than the GLF AAAs and thus have not had issues like this. What's the determining factor is the short-term gains vs the long-range gains mentalities. The Callaway is the last of the three AAAs to have hull issues. The Anderson had them back in 2017, the Clarke had them before (she sat idle for a few consecutive seasons if I recall correctly), and now the Callaway. I wouldn't say it's an issue specific to the Callaway. The current economic situation, and the fact that the AAAs seem to be in a 2/3 rotation and have been for some time, have people speculating at what point the GLF might be looking at dumping one. Since she's the one in need of repairs now, Callaway might be the unfortunate candidate, but it could have been any of the three. 5 years ago, it would have been the Anderson, 10 years ago, it would have been the Clarke. As people have said in other threads, though, the future of shipping looks to be more in the area of smaller, more versatile ships, and it may be that the owners see value in that. Another factor is if GLF sells and who the buyer is.
My best hunch, and it's only a hunch, is that GLF will buy outright from CN in several seasons. I believe CN put the fleet on the table at the beginning of the year in the face of strong commodity prices in hopes they could get a good price. At least one bid was made (I'm guessing from Algoma), but it was well shy of the price they were hoping to get. In the meantime, GLF is saving capital to purchase the fleet. There's a good chance the Blough and Callaway will sit until then, and CN will likely pocket the insurance claim from the Blough. The new owners will then have to dispose of them as they see fit. Chances are the two ships will come as part of the package, and a good chance at that point that GLF may evaluate the long-term plans for their fleet. To stay competitive with Interlake and ASC, they may see fit to hold on to one or both of them.
I do see the AAAs getting repowered at some point, and it may be in a looming recession that the price for that might be reasonable. Right now, the demand and inflation are too high. They're good ships and the hulls had major work done a few seasons ago (except the Callaway).
Long story short, I see the Callaway as a likely candidate for surviving, and the Blough as the unlucky recipient of a perfect storm of circumstances. I think a lot of people saw the Anderson and Clarke as scrap candidates when they had issues but the owners did the necessary repairs. The AAA class has proven it was well built and very versatile, and to rebuild that tonnage would cost way more than fixing the ballast tanks.