by GuestfromEU » October 15, 2022, 12:10 pm
Vessels with lower cargo capacity and ability to trade with more options are absolutely the future. However, the cost of shortening the AAA-class, in addition to required the re-powering to be competitive, would be a poor proposition. To remove the 96 foot sections is a complex task. The engineering preparation alone would be costly, further compounded by the true time and material cost of the modifications. It's not as simple as chopping out the added sections - electrical work and modifications to the self-unloading system would be costly, and the hull stability engineering also requires calculations and approvals - just because the ship is returned to original dimensions does not mean the process is streamlined. Stability and construction rules have changed since the 1950's and the ship would need to comply with current class rules of construction. In the end it would result in a ship that would be re-powered and returned to service, but the ship is still 70+ years old, and a high cost was invested to attain this asset. Why this is a bad option is evident in why Interlake elected to build the Mark Barker. Like renovating an old house, at a certain point it is not economical when compared to tearing down and building new.
I do not foresee the Ryerson returning to economical service in Seaway voyages. The cargo capacity is less than Algoma or CSL gearless ships, or even the self-unloaders. Those ships were optimized for Seaway trading whereas the Ryerson cannot compete on capacity or efficiency. The fuel consumption of the Ryerson as a steam plant is probably double the Trillium or Equinox ships. Re-powering the Ryerson is not economically attractive when considering the end result - much like the AAA-class, the cargo capacity and economics cannot compete with a new ship.
US shipowners are not interested in direct competition with Canadian operators with regards to the Seaway grain or iron ore trade. It is far more economical for Canadian owners to monopolize this trade when factoring the USD/CAD exchange and subsequent lower cost of Canadian ship operations, and ships optimized for the Seaway trade. Even the John J Boland or similar existing Seawaymax ships in the US fleet are not competitive with new ships.
Future ships built for US owners will likely be similar in design to the Mark Barker. Agility to trade in many sectors and adapt to economics is crucial since future trades are unknown, but even a layman can understand the declining cargo lift capacity. Coal-fired power stations converting to natural gas (or shuttering), the cyclical nature of the iron ore sector, future conversion of integrated mills to electric arc furnaces, and even the construction aggregate industry all pose challenges for the future. Some of these factors are known - the iron ore fluctuations have been around forever - but there is the unknown of the coal trade. This is one reason CSL and Algoma pursue overseas ventures in an effort to diversify the income stream. Those two companies market themselves publicly as Great Lakes ship operators, but in truth much of the company revenue is from the international ventures.
It would be fascinating to see these aged ships continue trading, don't get me wrong. But shipping is a business and there needs to be sound financial decisions taken to justify any capital improvements to the fleet. In any event, significant upgrades like re-powering are not attractive at this time due to long delivery times from manufacturers for critical components like engines and electrical, further compounded by high costs. A simple electric motor that may have cost USD 500 in 2020 now costs USD 900, for example. Extrapolate these costs over the total project expenditures and it's reasonable to say the project cost could be millions more in today's date compared to a the past. At least Interlake fixed the construction contract before inflation and material shortages came to full effect.
Vessels with lower cargo capacity and ability to trade with more options are absolutely the future. However, the cost of shortening the AAA-class, in addition to required the re-powering to be competitive, would be a poor proposition. To remove the 96 foot sections is a complex task. The engineering preparation alone would be costly, further compounded by the true time and material cost of the modifications. It's not as simple as chopping out the added sections - electrical work and modifications to the self-unloading system would be costly, and the hull stability engineering also requires calculations and approvals - just because the ship is returned to original dimensions does not mean the process is streamlined. Stability and construction rules have changed since the 1950's and the ship would need to comply with current class rules of construction. In the end it would result in a ship that would be re-powered and returned to service, but the ship is still 70+ years old, and a high cost was invested to attain this asset. Why this is a bad option is evident in why Interlake elected to build the Mark Barker. Like renovating an old house, at a certain point it is not economical when compared to tearing down and building new.
I do not foresee the Ryerson returning to economical service in Seaway voyages. The cargo capacity is less than Algoma or CSL gearless ships, or even the self-unloaders. Those ships were optimized for Seaway trading whereas the Ryerson cannot compete on capacity or efficiency. The fuel consumption of the Ryerson as a steam plant is probably double the Trillium or Equinox ships. Re-powering the Ryerson is not economically attractive when considering the end result - much like the AAA-class, the cargo capacity and economics cannot compete with a new ship.
US shipowners are not interested in direct competition with Canadian operators with regards to the Seaway grain or iron ore trade. It is far more economical for Canadian owners to monopolize this trade when factoring the USD/CAD exchange and subsequent lower cost of Canadian ship operations, and ships optimized for the Seaway trade. Even the John J Boland or similar existing Seawaymax ships in the US fleet are not competitive with new ships.
Future ships built for US owners will likely be similar in design to the Mark Barker. Agility to trade in many sectors and adapt to economics is crucial since future trades are unknown, but even a layman can understand the declining cargo lift capacity. Coal-fired power stations converting to natural gas (or shuttering), the cyclical nature of the iron ore sector, future conversion of integrated mills to electric arc furnaces, and even the construction aggregate industry all pose challenges for the future. Some of these factors are known - the iron ore fluctuations have been around forever - but there is the unknown of the coal trade. This is one reason CSL and Algoma pursue overseas ventures in an effort to diversify the income stream. Those two companies market themselves publicly as Great Lakes ship operators, but in truth much of the company revenue is from the international ventures.
It would be fascinating to see these aged ships continue trading, don't get me wrong. But shipping is a business and there needs to be sound financial decisions taken to justify any capital improvements to the fleet. In any event, significant upgrades like re-powering are not attractive at this time due to long delivery times from manufacturers for critical components like engines and electrical, further compounded by high costs. A simple electric motor that may have cost USD 500 in 2020 now costs USD 900, for example. Extrapolate these costs over the total project expenditures and it's reasonable to say the project cost could be millions more in today's date compared to a the past. At least Interlake fixed the construction contract before inflation and material shortages came to full effect.