Lakers reborn for the modern era

North America’s Great Lakes region is the birthplace of the self-unloading vessel, where they are commonly known as Lakers. Such vessels have long since spread their wings and found new homes. But even in their core market they show no signs of age-related weariness.
 
Business for Lakers is inclined to be variable, but the life expectancy of the vessels is generally longer than that for ocean-going ships, so investment decisions can be made with an eye on the long term.
 
Canadian carrier Algoma Central, for example, reported volumes and revenues down in all major markets in 2016. The most significant impact was in salt, for which an extremely mild winter caused a 48% drop in volume compared to the prior year. Because this was anticipated before the spring fit-out, one of the ships usually dedicated to this trade did not sail in the first half of the 2016 navigation season. Revenues from salt were down 42% as some efficiency gains in trading patterns offset a portion of the volume drop, and resulted in an improvement in daily earnings.
 
Agricultural markets began the year slowly, largely a result of a poor grain harvest in 2015. The season began with a more gradual fit-out for the grains trade and volumes in the first half of the year were substantially lower. A better harvest in autumn 2016 enabled the group to make up some of the shortfall, and it finished the year with volumes down 10%. In addition to the lower volumes, shorter average trip times reduced the daily earnings from this sector.
 
Soft metals
 
Iron and steel volumes were down 8%, reflecting continued softness in that industry. Late in the year, an unexpected increase in export ore demand presented an opportunity to use two ships that had not previously operated in 2016. These vessels were fitted out in the late summer, and operated through the year-end. This business, in combination with some other favourable trading patterns,  resulted in improved daily earnings, but not enough to offset the impact of the lower volumes. Revenue was down 6%.