American Fortitude Updates?

[garbear]

The demise of the american fleets can be easily traced to the decline in american industry and ports. Flew into Buffalo last week, its amazing how vacant the port looked. The docks and slips are still thier but the mills are gone. Here in Erie with the exception of Erie gravel, nothing remains of prr coal and ore docks. Port of Cleveland as well of Chicago are no where close to what the looked like in the 70's. Huron oh is down to just dock where iron ore is unloaded, the shore side equipment is gone, the grain dock has closed. No customer's no docks, no ships.
I really wonder if tariffs will save steel this time around. The world is a global community now, not like in the good old days. Ownership continue to change to non american companies. Time will only tell.

I think ore shipment into Huron was discontinued years ago. I think they still get stone shipments, but no more ore.

[Pdblk25]

I fail to see how the current situation has to lead to the utter collapse of the American steel industry. Every so often steel gets dumped into the US because of some condition overseas. Eventually it stings enough and the government takes action and introduces tariffs. It will just take a little time,

I'm from NW Indiana & I've seen the Steel Industry go thru dozens of cycles of import-driven boom & bust, The current situation is much different. Previous administrations got nervous when imports hit the teens & usually applied "Tariff Relief" when imports reached 15 to 16%. Steel imports are now 33%, and the administration favors a Transpacific Trade Agreement that would drop tariffs on Asian Steel even more. The domestic industry is far past the level of a "sting" & closer to a hemmorage.- and the government response is to lower steel Tariffs Further. Allowing this amount of imports plus the Administration's "remedy" of further reducing Tariffs "is how the current situation [may] lead to the utter collapse of the American steel industry".
So "a little time" has passed & the end for domestic steel & most of the U.S. Lakes fleet (which depends on the Steel Industry) is in sight.

[Duluth Guest]

The steel industry here in the US is in some serious trouble and the reason for it is due to an inefficient system of production mostly due to sub-par raw materials. The shipping industries are part of this system and it's not that the shipping system is inefficient, it's the overall system. Let me explain a little.

The best stuff to ever come out of the ground on the Mesabi, that soft red Hematite from the glory days of iron mining here in Minnesota, was often better than 65% Iron. Taconite Ore, all that remains in the ground on the Iron Range, is around 16-30% Iron. This means that we have to spend money and apply costly energy in order to concentrate it into pellets that, in the end, contain about 65% Iron. Due to geographic constraints, we then ship these pellets by boat, 65,000 tons of it at a time (if it's a 1000 footer) to the steel mills which have been converted (at additional cost) to utilize the concentrated pellets.

In contrast, the iron mines of Brazil and Australia, produce ore that is better than 65% Iron straight out of the ground, on par with that nice red Mesabi Hematite. How much processing does it take to make it usable in the furnaces then? Most of the processing that this stuff sees is more for ease of transportation than for refinement. In addition, not having the geographic constraints to deal with, they can ship it 300,000+ tons at time in super-sized sea going ore carriers. That's 5 trips of our biggest carriers to one of theirs. You can see how the $/ton metrics really favor the foreign producers.

In a nutshell, if the system is to survive, producers are going to have to figure out how to bring the metrics back into balance. That means you have make the same stuff less expensively and get it to the plants in sustaining quantities at less cost. Taconite plants being used on the Iron Range and the method to produce it are old technology and old infrastructure. The newest plant is 60 years old (North Shore Mining). This isn't anything new, in fact, it's old news and it begs the question, why haven't we moved forward with the technology? Moving product at less cost has been an issue with the shipping industry for years and it has given rise to the age of the tug-barge combinations and the end of the steamship era on the Great Lakes. Automation of vessel systems and overall re-powering has been in the forefront of many news stories for years. Larger ships with less crews, again, it's old news and the reason that we don't see any footers "on the wall". sitting idle.

The real question is, when do we reach the breaking point where it just isn't possible to compete anymore?

Here is some additional reading:

http://www.duluthnewstribune.com/busine ... -minnesota

[garbear]

I sailed for USS in the 70s. I think there were roughly 50 boats running when I started. You forget, USS had the South Works that had two unloading docks, Lorain and Central Furnace in Cleveland. The bigger boats on a lot of occasions would get dock priority over the older, smaller boats. Also, with the big difference in the speed of the boats, the AAAs could run circles around the older boats. Same thing with the Supers. Also, on the Clarke we didn't just unload at USS docks. Throughout the 70s we unloaded at Youngstown Sheet and Tube, unloaded several times in Toledo, Ashtabula, and the Lakefront dock in Cleveland, plus once in Huron. The smaller oil burners and diesels were usually sent to Central Furnace. There would be backups on occasions. A lot of our waiting would be for Canadian Lakers, not boats from USS.

[rob from Erie pa]

The demise of the american fleets can be easily traced to the decline in american industry and ports. Flew into Buffalo last week, its amazing how vacant the port looked. The docks and slips are still thier but the mills are gone. Here in Erie with the exception of Erie gravel, nothing remains of prr coal and ore docks. Port of Cleveland as well of Chicago are no where close to what the looked like in the 70's. Huron oh is down to just dock where iron ore is unloaded, the shore side equipment is gone, the grain dock has closed. No customer's no docks, no ships.
I really wonder if tariffs will save steel this time around. The world is a global community now, not like in the good old days. Ownership continue to change to non american companies. Time will only tell.

[Guest]

The widespread introduction of self-unloading technology into the ore trade since the late 1960s early 1970s has also reduced the number of ships required by the US flagged fleet. As these ships spend less time unloading than gearless bulkers there are fewer delays experienced by arriving vessels in waiting for an unloading berth. Fewer ships also translate into less congestion at loading ports, at the locks, and reduced traffic in the rivers. Perhaps someone can let us know how the U.S. Steel fleet operated when they had dozens of ships in service in 1950s. Although the steel making operations served by that fleet has been considerably downsized, it seems that there had to be periods of heavy traffic waiting for docks at ports like Conneaut and Gary.

[Guest]

One factor not mentioned thus far in the Canadian vs. U.S. fleets is the geography of Canada itself. Looking at a map will show that Canada has many major ports heavily engaged in both domestic and international commerce east of the Welland Canal. Two of these (Toronto and Montreal) are the largest cities in that nation. While the U.S. has a number of large metropolitan areas located on the lakes as well (notably Chicago, Milwaukee, Detroit, Cleveland, and Buffalo) the movement of materials into and out of these ports do not require transits of the Welland Canal and thus ships serving in the American fleet can be built to larger dimensions than their Canadian flagged cousins. A comparison of the two fleets would required a detailed study far too long to post here.

[Guest]

I am no economic guru, but I fail to see how the current situation has to lead to the utter collapse of the American steel industry. Every so often steel gets dumped into the US because of some condition overseas. Eventually it stings enough and the government takes action and introduces tariffs. It will just take a little time, as it has on all the other occasions.

The US Fleet has some changes to adapt to regardless of the current steel situation. Coal is on a downtrend. It will continue to be on a down trend.

[jzcleve]

Canada has no use for anything like a 1,000 foot laker, no trade patterns to really support it and useless in the seaway trade. As far as comparing the fleet to the sixties, that is pointless. Yes the biggest ships can carry as much as four older ships at less cost, but there are many factors involved here. I can remember flying into Buffalo in the summer of '86 and seeing what I think there were two ASC footers laid up for lack of business. How efficient the ships were didn't matter. When there were more ships around with cargoes to move they needed all the related support services and there was cash changing hands, good for the economy. The newest ships (say the since the mid '70's) are efficient at what they do, and they help the bottom line compared to an old steamer, but the improvement to the bottom line only lands in the pockets of a few at the top. There aren't anywhere close to the number of people employed in shipping on the lakes and all related industries as there were 30-40 years ago.

[rocky]

How does overall available tonnage compare today between the US and Canada? Canada has no 1000 footers each of which could equal 2-3 Canadian boats. Also how does today's tonnage in the US compare with the tonnage pre 1000 footer era? Late sixties for example?

[rob from Erie pa]

I think you will continued to see a reduction in american fleets as their consumers continue to decline. Some predict it could be as devastating as the 80s's.

[US Laker Mate]

The canadian and american fleets are totally different animals and cannot be compaired very well.

for the most part the US side has larger boats (1000 footers) with runs like the lake head to Burns, or lake head to St. Clair and Monroe. the Canadians have seaway maxes mostly doing long trips out the seaway from the Lake head to something like Quebec. They do different things with different assets, a strictly ship for ship compairison is not valid in anyway.

[Denny]

I am well aware of some of the fleets that have departed astz and that is why I said in my earlier post "There are far too many too list here and that is why I only included a couple of them just to make a point was all." I said and mentioned that "The list of fleets that have left us is too long and would take up too much space here on this board." I was just trying to refer to the fact that it seems that in today's Great Lakes Shipping as we know and see it today, I can see more Canadian ships than U.S. ships even though many of the huge companies have left the business. Just my thoughts only here!

[astz]

the list of the departed is longer than that..dont forget Papachristidis and Halco. Sofati-Soconav, Enerchem, Branch Lines...

[Guest]

I think its largely do to the cargo mixture between the two countries. Us fleets appear to be tied closer to the steel and coal industries, along with other related stone aggregates. The Canadians fleets are involved with them too, but have thier traditional ties to wheat and wheat board. Canadians still have tankers in thier fleets as well. Luckily the wheat and tanker trade ssems to be a lot more stable then the american traditional customers.

[Denny]

In reading many of your comments here folks, I agree in some ways as far as the older fleets and companies leaving the shipping business such as Oglebay Norton and Cleveland Cliffs among the many. I could go on but, it would take forever and fill up way too much space here. While I agree and see many fleets shrinking in the amount of vessels on their roster, I do have a point to make on this though. It seems to me unless I am missing something here, the U.S. fleet of ships seems to be shrinking in numbers, while on the other hand the Canadians seems to have more vessels in total than the U.S. fleets do. If you take and add the combined total of all the major Canadian companies along with both Algoma and the Desgagnes tanker fleets along with the McKeil and Purvis fleets you have more than the U.S. and even if you take those fleets out it is still more than the U.S. fleets. Yes, I know that Algoma and CSL have been building new vessels to replace older ones most of which sail on saltwater more than the U.S. ones. It just seems that there are more Canadian ships out there than U.S. ones IMO.

[jzcleve]

I hadn't realized so many fleets were gone until I saw the names compiled like that - sad. I have to agree that from a worldwide economic standpoint, things are not healthy, and our industry surrounding the lakes that employ the ships we 'nerds love is not healthy and has been in a slow decline for many decades. I don't feel it is just changing economic patterns, the patient is ill, and most likely will decline further and probably will never recover to the "good old days" we would love to see. I can remember riding my bike through Clevelands flats in the '70's, and things were starting to decline back then. It is a ghost town now compared to those days!
Enough ranting on that!

The few comments referring to this as "strange" are how I feel. I am under no delusion that the Fortitude won't be scrapped, it is just a gut feeling that I shouldn't believe this one until I see it.

[Guest]

She's probably not replacing a smaller vessel.

Rather, she's probably relieving a smaller vessel like the Saginaw from runs that a larger ship like the Frontenac can handle, allowing the river class vessel to service their new contract that led to the construction of this new river class self-unloader in China.

[pdblk25]

The Seaway-max S-U Frontenac as a 140-day replacement for a River-class boat? All of LLT's River-class boats are already committed, so how can a 730'x75' boat serve river customers? As for the MV. Tecumseh, I'm sure she's tired. After almost 30 years on salt water - however well cared for - that amount of time as a Salty has had a detrimental effect on her plating, piping & tanks. She is probably ready for replacement (She's 42, and spent most of her life on Saltwater).
As for the Kam she is considerably newer (1983), and I havent heard any complaints about her or her sisters, the MVs. Sprucegleb & Birchglen active CSL bulkers
If LLT gets the American Fortitude (A Big IF), I could see her as a replacement for the Tecumseh, or fulfilling a new contract.

[astz]

On the Cdn side at least the handful of remaining owners had better be worried. They are now at the mercy of steel producing multinationals with the reality being that these foreign owned entities having no roots in the lakes will have little compunction about cutting rates or capacity if things get even tougher. And this is spilling over into the agriproducts side with the venerable Canadian Wheatboard having recently been sold to a Saudi-led consortium the same thing could happen if the grain market goes to the dogs.