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Lakers reborn for the modern era

Still dominant in the Great Lakes trades, self-unloading vessels show no signs of retiring gracefully.

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Interlake’s JAMES R BARKER carried 60,000t of Mustang superflux pellets in June
Interlake’s JAMES R BARKER carried 60,000t of Mustang superflux pellets in June

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%.

Shipments of aggregates and construction materials also fell, by 18% year-on-year, and revenues for the sector were down 21% as daily rates dropped.

A similar picture was seen by US flagged Lakers, which moved 83.3 Mt of cargo in 2016, a decrease of 4.5% compared with 2015. The 2016 float was also 7.7% below the fleet’s five-year average, the Lake Carriers’ Association reported.

Iron ore cargoes totalled 44.1 Mt, an increase of 7.8%. However, all other commodities fell compared with 2015. Coal was down 26.6%, limestone dipped 8.4%, and cement fell by 6%. Salt cargoes were off by nearly 11%, while shipments of sand fell by 17.1%, and grain decreased by almost 30%.

But there are signs that 2017 may turn out to be somewhat better than the previous year. In its third quarter results, Algoma posted a revenue increase of C$7.6M and C$31M for the nine months ended 30 September compared with the same periods in the previous year. The increases for both periods were due primarily to higher volumes of salt and iron and steel products. The impact of higher fuel costs was passed on directly to customers as part of the freight rate. However, volume increases were partially offset by lower freight rates in certain sectors.

 CSL has put a total of 11 newbuild Trillium Class vessels into operation since 2012
CSL has put a total of 11 newbuild Trillium Class vessels into operation since 2012

Fleet renewal

Market volatility notwithstanding, a significant renewal of the Laker fleet has been underway for a few years. Fleet owners, at least on the Canadian side, have been busy replacing older vessels with newer ones, suggesting that rates remain healthy enough to justify the investment. This is being driven by two major factors, the higher operating costs normally associated with older vessels, and growing environmental awareness to make ships plying the lakes cleaner.

 

In 2012, Canada Steamship Lines (CSL) and Algoma Central started taking delivery of new vessels following orders placed two to three years earlier. The removal of Canada’s 25% import duty on new ships in the late 2000s coincided with a rise in the value of the Canadian dollar and a collapse in world shipbuilding prices.

 

Canada lacks a significant domestic shipbuilding industry, and those few yards that exist are focused on military vessels for the country’s navy. In spite of this, the federal government previously maintained a 25% duty on ships built outside the country, essentially protecting an industry that no longer existed. At the same time, the low exchange value of the Canadian dollar made building outside Canada too expensive.

 

Scrubbers

 

But with the changed circumstances, CSL and Algoma embarked on a newbuilding spree. CSL designated its fleet additions as Trillium Class, while Algoma developed its Equinox Class fleet. The construction of the Trillium and Equinox ships represented the biggest addition of new tonnage to fleets working the St Lawrence Seaway since its opening in 1959.

 

A total of 11 newbuild Trillium Class vessels were put into operation from 2012 onwards. The fleet includes four self-unloading Lakers for CSL’s Canadian fleet (BAIE ST. PAUL, BAIE COMEAU, THUNDER BAY and WHITEFISH BAY), three Panamax self-unloaders for CSL Americas (RT HON PAUL E MARTIN, CSL TECUMSEH and CSL TACOMA), and two other vessels of the same class and design for pool partner, Norwaybased Torvald Klaveness. Two gearless bulk carriers, CSL WELLAND and CSL ST LAURENT, were added in late 2014.

 

The Trillium self-unloading Lakers have a dwt of 34,500t, and measure 225.5m in length with a beam of 23.76m. They are equipped with five holds and have a net hold capacity of nearly 42,000 m3. The average unloading rate is 5,450 tph.The three Panamax selfdischarging carriers are of 71,319 dwt, 228.6m-long, and have a beam of 32.26m. Hold capacity is 71,476 m3 , and they operate an 80m boom for self-discharging.

 

In September this year, two of the Trillium class Lakers participated in the first inbound dry cargo transhipment from a Panamax self-unloader. The operation was carried out at Port of Sept-Iles, Québec, signifying the open ing up of the market for international cargo to St Lawrence and Great Lakes customers.

 

The event was also the first such collaboration between CSL’s Americas and Canadian fleets.

 

Carrying 39,000t of anhydride and 17,000t of gypsum, both loaded in separate ports in Spain, CSL METIS embarked on a 10-day journey across the Atlantic Ocean. Once anchored in the northernmost anchorage in Sept-Iles, the Panamax ship was met by THUNDER BAY.

 

Following a meeting between the two vessels’ masters on board CSL METIS, the transhipment operation was finalised, culminating in split cargoes loaded in separate holds, first on THUNDER BAY and then on WHITEFISH BAY, both bound for destinations in the Great Lakes.

 

The cargo transfer operation began shortly after the meeting. During the transfer, appropriate ballast water operations were performed to minimise the freeboard differences between the ships, and to avoid excessive trim by the stern.

On completion of the transhipment onto THUNDER BAY, the vessel departed, and the WHITEFISH BAY was berthed alongside CSL METIS, and the cargo transfer was repeated.

 THUNDER BAY (pictured)
THUNDER BAY (pictured)
Mild winters have hit salt volumes for the Lakers
Mild winters have hit salt volumes for the Lakers

Equinox rising

 

Algoma Central’s Equinox Class previously comprised four gearless bulkers, but in November the first self-unloader in the class, the Seawaymax sized ALGOMA NIAGARA, arrived at Sept Iles.

 

Following inspections and Canadian re-flagging, the ship loaded its first cargo of iron ore from Port Cartier, and departed for Hamilton, Ontario. Her next cargoes were scheduled to be metallurgical coal for the steel industry, followed by grain from Thunder Bay.

 

The NIAGARA is the first of three Equinox self-unloaders built at the Yangzijiang shipyard in Jiangsu, China. The ship is a traditional boom-aft twin belt self-unloader with a dwt of 39,000t at design draught (29,100t at seaway draught). The ALGOMA SAULT is nearing completion, and the ALGOMA CONVEYOR, which the company acquired at auction from the failed Nantong Mingde shipyard earlier this year, is undergoing refurbishment and final construction. SAULT is expected to arrive in Canada in time to start the 2018 navigation season, and CONVEYOR should be completed and delivered in early 2019.

 

Algoma says the Equinox Class represents a new generation of Great Lakes-St Lawrence vessels. The ships have been designed to optimise fuel efficiency and operating performance while minimising environmental impact.

A 45% improvement in energy efficiency per tonne of cargo carried has been demonstrated by the four operating Equinox gearless bulkers, the company says. This improvement results from the use of Tier II compliant engines, increased cargo capacity, and an improved hull form.

The ALGOMA NIAGARA is the first of three Equinox selfunloaders built at the Yangzijiang shipyard
The ALGOMA NIAGARA is the first of three Equinox selfunloaders built at the Yangzijiang shipyard

Scrubbers

 

In addition to design features aimed at greater efficiency, the ships use an IMO approved exhaust gas scrubber, certified to remove 97% of sulphur oxides from shipboard emissions. This, adds Algoma, is the first application of a fully integrated scrubber on a Great Lakes-St Lawrence class vessel.

 

The cargo holds have been designed to reduce areas where cargo can hang up during discharge. Deck arches, historically located within the holds, have been replaced by strengthened hatch coaming structures that not only protect against potential fall hazards, but also maximise the cubic capacity and cargo stowage.

 

An automated hold washing system fitted on the selfunloaders reduces or even eliminates the requirement for crew to work in the hold, as well as the amount of water used in cleaning.

 

In addition, the totally enclosed boom eliminates spillage, and reduces dust to minimum levels. A fixed dust suppression system is also fitted and can be used as and when required, either according to customer or location demands.

Special coatings have been applied to all underwater hull surfaces. The hard smooth finish reduces hull surface friction and fouling, with measured surface roughness about 50% smoother than typical coatings.

 

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