More Developments at Horizon Lines [LEFT]Today, Horizon released its 4th quarter results and filed its 10-K for 2011. Read the press release [COLOR=#0000ff]here. Is this company dead in the water or what?[/COLOR] Now SFI is stuck with it. If this were not the liner shipping industry, we could let Horizon fail and move on, but the cargo has to move. How bad does this have to get before a real buyer steps up? Horizon doesn’t need yet another financial buyer, it needs a strategic buyer, someone who can run the business efficiently and who can modernize the fleet. There are two obvious candidates: I guess that they are both waiting for something more to fall off the Horizon jalopy. April 11, 2012.[/LEFT]
Read the 4th quater financial statement
$98M operating loss of 2011
$167M negative shareholder equity
vis the company if worthless and I have no clue why anybody would keep pumping cash into this sinkhole of antiquted ships and inefficent operations. Tim Colton is right…they have to just die and be done with then some real company needs to start the whole thing anew with modern ships. The cargo is there and the freight rates will support new construction at today’s low interest rates. For God’s sake Saltchuck (Tote & SeaStar Lines) , you can become the biggest Jone’s Act liner trade operator in the US. Don’t wait for Horizon to crash and burn and allow the anti Jones Act forces to gain ammunition. Take over the mess, change the name, force the government to assist as the routes are critical and get new ships on order. You know the folks at NASSCO. Have them build basic Korean design ro/lo vessels which there are no unknowns in their construction.
This is doable! Time to make the US coastwise liner fleet enter the 21st century.
any Horizon Lines mariners here? Give us your input.
I agree with all of this. There are a few companies that I think could jump in on this. However the container market being what it is, along with the large capital to purchase and reinvest in equipment, make it a big risk for any company looking to either expand or enter this market. Companies like Saltchuck or even Crowley have the kind of capital to pull this off. Both are established in the Puerto Rico trade and have a large working capital to pull it off. I recently read this article from World Maritime News about Crowley http://worldmaritimenews.com/archives/51171 Perhaps a sign of things to come. Only time will tell.
An interesting possibility there with Crowley and you’re correct that they too can take over Horizon’s routes as well. Maybe both Saltchuk and Crowley both are waiting for Horizon to implode and then buy up the valuable assets (terminals and containers) at a tiny fraction of their worth but the routes cannot be taken over without having to use the antique Horizon ships for long enough to get some modern vessels built which would be two to three years.
Either way, the MMP/MEBA contracts for the Horizon Lines ships go bye bye and AMO gets all those jobs.
This just made me think about Maersk. Would they be legally able to enter into the coastwise trades as well? Why did they not take them over when the bought SeaLand in the 90’s? Did the government prevent them or did Maersk just not want the junk vessels?
Perhaps that is the reason Crowley is shopping around for new container ships? Get a jump on fleet replacement for if and when the time comes. Have some new tonnage being finished or even at the ready right as Horizon hits rock bottom and jump right into it. I think Maersk only purchased the international fleet of SeaLand in the 90’s. However, if you were Maersk would you want to buy a fleet of old, inefficient, container ships? They could also be a player in this that we are not taking into account. As you stated, everyone is watching and waiting for the bottom to fall out. Lots of possibilities as to what might happen.
What about matson? Already established in Seattle, maybe they will make a move?
I just don’t see Matson outside of the narrow range they occupy in Hawaii and transPacific trades. Saltchuk and Crowley both are in Alaska and Puerto Rico already so it is more of expanding what they already have in place with more pure container services.
Saltchuk is already in the Hawaii interisland trade (they own Young Bros.) but not yet in the US mainland to Hawaii trade so that should be easy for them if they take over the Horizon’s terminals. With Crowley, Hawaii would be a mit more effort to build a Hawaii service yet the same goes if they take over Horizon Lines’ terminals and equipment. I still say that this opportunity really belongs to Saltchuk right now and I hope they seize it. That is one group who really knows their shit and what they touch always turns to gold. It is rare for me to say it, but that is a bunch I respect greatly and would love to get to work for.
Well I guess time will tell, at any rate someone will have to build some new ships for the run as the emissions standards will most likely not permit older iron from operating in Alaska but you never know.
Well I guess time will tell, at any rate someone will have to build some new ships for the run as the emissions standards will most likely not permit older iron from operating in Alaska but you never know.
The emissions time bomb also exists in California and none of the steamships Horizon has come close to passing. Steamers are dirty sooty stinky vessels which the entire world (except for the good old US of A) stopped building in the 60’s. Steam has been dead for 50 years and yet the US flag fleet is still filled with effing steamers…we should all put a bag over our heads in shame!
Does Matson have the capital to do a Horizon lines buy out and replace old tonnage? If they did buy out Horizon, wouldn’t they be replacing old tonnage with old tonnage? To me it doesn’t seem like a strong business model. C.Captain hit the nail on the head. While both Crowley and Saltchuk could potentially make a success out of this. Saltchuk has the upper hand with more established logistics and support. They definitely do have their ducks in a row and know how to operate a business effectively even in tough times. Perhaps we will be seeing a queue to NASSCO for some container ships in the near future? Interesting stuff to say the least.
Tote still does have their old two ships sitting around. I know one has been idle in Tacoma for awhile although it is only ro/ro. Could one of these companies take on the lease of the old horizon ships and operate them under the same agreement?
Both TOTE and Horizon serve Anchorage from Tacoma. Wouldn’t that not be allowed? The Greatland and Westward Venture are 35 +/- yrs old themselves, and steam plants. The Matson ships are getting VERY old. Just sailed on the Lihue (41 yrs old-1971) and put the Lurline in layup (also an ancient ship). They will have to do something soon, as when California’s emission requirements reach out 200 miles and get tougher, they won’t be able to tun their current fleet. And the 2 mentioned are in really rough shape. TOTE is a great company to work for, at least in the 90’s. Doubt that has changed.
Tote still does have their old two ships sitting around. I know one has been idle in Tacoma for awhile although it is only ro/ro. Could one of these companies take on the lease of the old horizon ships and operate them under the same agreement?
Whatever happens to Horizon Lines, steamers will have to stay around long enough till new tonnage is delivered. Where the two old TOTE ships fit in to me is unclear. That pair has no advantages that I see so I don’t think they’d be any part of a Saltchuk takeover of Horizon.
As has been said previously, maybe Saltchuk & Crowley both are sitting and waiting for the implosion to occur when the one with the stronger hand will grab the spoils which are the routes and terminals but the ships are the weak link in this matrix. That old antiquated tonnage must go and go soon! This recogning is two decades overdue. Perhaps Crowley might be the winner if they get the new tonnage contracted before Saltchuk. Which company is the bigger gambler? Both are privately held so neither need to answer to shareholders.
The Westward Venture went to the scrap yard late last year as did one of the Sea Star Lines ships I believe. The Great Land is kept around as a back up ship for when the North Star or Midnight Sun are out of service for their yard periods.
Hi,
I see that this an old thread, but if any of you guys are still on here, I was wondering what your thoughts on this are now. Horizon seems to be in even worse shape now than in 2012. The Matson buyout rumor is spreading around here (Dutch Harbor AK)
Thanks
They just laid up the Horizon Discovery in the East coast run.
Brownsville…
They spent a lot of money in that ship (last lancer in the fleet) and and finally when it was running ok they took it out, almost starting the high season.
Word is that Crowley is back at the table trying to work something out withHorizon once again for the San Juan Port, the important one in that East coast run.
National Glory pick up the cargo for Horizon to be delivered to Houston and more interesting is that Horizon basically rented out the space on the national glory.
Rumor is that National Glory ship is a joint venture with Crowley…
I towed the Westward Venture from Baltimore to Brownsville. She didnt want to die as she fought us the whole way. It got to the point that the gear that was holding the rudder in place broke free and a crew had to meet us off Tampa to go aboard and fix it.
[QUOTE=c.captain;67126]The emissions time bomb also exists in California and none of the steamships Horizon has come close to passing. Steamers are dirty sooty stinky vessels which the entire world (except for the good old US of A) stopped building in the 60’s. Steam has been dead for 50 years and yet the US flag fleet is still filled with effing steamers…we should all put a bag over our heads in shame![/QUOTE]
Not sure what, exactly, is going to happen to Horizon. I’m also not sure how their company is structured–would it be possible for them to basically spin off the Alaska (and maybe the Hawaii) trades and just bankrupt the rest? I know their Alaska operation is still profitable. They do face the same issue as they do everywhere else, which is old ships, but if they didn’t have the rest of their operation dragging them down then they could probably finance a couple new ships.
Here is what I do know: TOTE no longer has the [I]Great Land[/I] or the [I]Westward Venture[/I]. The [I]Great Land[/I] was scrapped about a year after the [I]Venture[/I]. They are, however, building two new LNG containerships for the Puerto Rico run. Crowley is also building two new Con-Ro ships for the same run. I believe both ships have more capacity, which might mean Horizon is functionally done on the Puerto Rico run. TOTE/Saltchuk also have options on three more container ships. I believe the thinking there is if Horizon drops out of the picture altogether, they can take over on the Hawaii run. Speculation has been that Matson might get in on the Alaska run, but I’m not sure what their financial condition is or if they have the fleet to handle it. Crowley may be a possibility also–they’re a huge enough company that they could probably build a couple ships without too much trouble.
Bayrunner–what was the [I]Venture[/I] doing coming out of Baltimore? They were towed from Tacoma–Baltimore seems a bit out of the way.
