I asked that question myself since I knew TOTE was an AK company. If I remember correctly it was filling in for a Horizon ship on the NY - San Juan run and when the run was up they tied it up.
[QUOTE=Bayrunner;147032]I asked that question myself since I knew TOTE was an AK company. If I remember correctly it was filling in for a Horizon ship on the NY - San Juan run and when the run was up they tied it up.[/QUOTE]
I believe the WV was on charter to MSC for sometime carrying shit to and from both Kuwait City and Karachi
[QUOTE=c.captain;147038]I believe the WV was on charter to MSC for sometime carrying shit to and from both Kuwait City and Karachi[/QUOTE]
That’s right, I saw them anchored off Kuwait a few years back. By the amount of secuity they must have been on charter with MSC. Saw them later with a deck full of beat up Humvees somewhere, near Singapore maybe.
Yep. The Northern lights as well. They used to load & discharge military equipment in charleston with them.
D’oh! For some reason I was thinking of the [I]Great Land[/I], she was the one towed from Tacoma. Yeah, the [I]Venture[/I] I think was laid up in Baltimore. The old [I]Northern Lights[/I] is now the [I]El Faro[/I], and I believe they’re running to Puerto Rico.
Hadn’t heard that the three-ship option had been declined. When was that announced? I also wonder how easily the options could be revived.
Options for three additional ships, says Chiarello, have expired. “We had to execute. We probably could have held the options longer if there hadn’t been such a significant uptick in construction of Jones Act vessels, because the yard was getting full. So we just weren’t ready to pull the trigger on options yet.” That said; the market should not assume that TOTE isn’t bullish on what’s to come next.
Thank you for all the info guys 
[QUOTE=c.captain;67126] 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]
Harrumpf …
[QUOTE=Steamer;147514]Harrumpf …[/QUOTE]
HARRUMPF YOURSELF! Except for some LNG carriers, what nation still operates steamships on the earth?
Word is that Horizon Lines Sold… There is a telephone conference today at 4:15pm East coast time. Rumors it was Matson…
Any posible scenarios here that you guys want to share?
Very interesting news. Obviously it’s going to take a while to finally shake out.
I can’t see there being any anti-trust issues unless Pasha and Matson are affiliated, which I don’t think they are. Basically it sounds like Pasha takes over Horizon’s Hawaii interests, while Matson takes over the Alaska side. Pasha is getting ready to deliver their second ship. Will that be enough for the trade, or will they be building more? Along the same lines, will Matson be building new ships for Alaska? I’m not sure if they have any ships that would stand up to that trade. I would imagine in the short term they would run the old D-7s.
Matson stays with Alaska and PASHa with Hawaii.
You got two different companies operating jones act from both states, I dont see a problem with that.
Which unions are involved? Do Matson, Horizon, and Pasha have the same or different unions? Will one union gain jobs while another loses jobs?
[QUOTE=tugsailor;147764]Which unions are involved? Do Matson, Horizon, and Pasha have the same or different unions? Will one union gain jobs while another loses jobs?[/QUOTE]
Matson and Horizon are both MMP deck and MEBA engine. Pasha, however, is AMO for deck and engine. So, it seems likely that MMP and MEBA will lose jobs in the Hawaii trade. Also don’t forget they’re going to lose jobs on the Puerto Rico run, and those jobs aren’t likely to be replaced by anybody.
so the shoe finally drops today…
Published: Nov 11, 2014 4:02 p.m. ET
CHARLOTTE, N.C., Nov. 11, 2014 /PRNewswire/ – Horizon Lines, Inc. (otcqb:HRZL) (“Horizon Lines” or the “Company”) today announced that it would cease providing liner service between the U.S. and Puerto Rico by the end of 2014 due to continuing losses without the prospect of future profitability.
Sea-Land Service, Inc. (“Sea-Land”) pioneered the marine container shipping industry and established Horizon Lines’ business on April 26, 1956, when the vessel Ideal-X sailed from Newark, New Jersey to Houston, Texas. Sea-Land introduced container shipping to the Puerto Rico market in 1958, which Horizon Lines has continued to the present.
“We have a 56-year history in the Puerto Rico trade and truly value the relationships we have established,” said Steve Rubin, President and Chief Executive Officer of Horizon Lines. “Unfortunately, a combination of factors, including uncertain prospects for the Puerto Rican economy, losses over recent years and more expected going forward, aging ships that we cannot afford to continue to maintain or replace, and upcoming large capacity additions by two other carriers has led to this difficult but prudent and necessary decision.”
In Puerto Rico, Horizon Lines has incurred substantial cumulative losses and negative cash flows in recent years, despite ongoing efforts to remain competitive. Horizon is currently serving the trade with two vessels built in the early 1970s that have become increasingly costly to operate and expensive to maintain. As recently as 2012, Horizon operated four vessels, but the Company had been forced to remove two vessels from the Puerto Rico service due to prolonged falling demand and the need to cut costs.
As an example of the challenges this aging fleet has posed, last month the Company chose to cease operating its Horizon Discovery in the Houston to San Juan trade route and has entered into an agreement to scrap this vessel. The Horizon Discovery built in 1968, would have required substantial expense to dry-dock for maintenance as required by federal law. The two vessels Horizon Lines presently operates in the trade are both required to be dry-docked similarly during 2015 at an estimated combined cost of $16-20 million. Furthermore, other carriers are scheduled to introduce four new, efficient vessels into service that will greatly expand capacity, further burdening Horizon Lines’ current, limited ability to offer ongoing service that can remain competitive.
Operations of the Puerto Rico service will be curtailed in a careful and orderly manner. The Company will cease liner service for domestic customers by the end of the year, however San Juan terminal services will continue to be provided into the first quarter of 2015. The Company will work closely with customers to assist them in identifying service alternatives.
The Company is expected to incur restructuring charges between $90 million to $100 million related to terminating its Puerto Rico operations. These charges include the cost of employee severance and termination benefits of $35 million to $45 million and costs of $55 million primarily related to equipment impairment and contract termination costs. Approximately $85 million to $95 million of the charges are expected to result in cash payments. These costs are preliminary estimates and are subject to change.
“On behalf of our entire Board and management team, I want to express our deep appreciation to our employees, customers, vendors, union partners, and the citizens of Puerto Rico for their efforts and support over the years,” said Mr. Rubin. “During my short tenure as CEO we have made tough decisions to try to restore profitability in the hopes of continuing the service. In addition, management had explored several other strategic options in an attempt to maintain a presence in Puerto Rico, however none proved to be possible. This decision is a very painful and difficult one for all of us, but it is the only viable course of action for our Company given the circumstances.”
Horizon Lines, Inc. also announced today that it has entered into definitive agreements for a series of transactions that will result in the sale of the entire company, the first being the sale of its Hawaii business to The Pasha Group (“Pasha”), followed by Horizon Lines, Inc.'s subsequent acquisition by Matson, Inc. (“Matson”) MATX, +0.00%
Horizon Lines’ decision to terminate its Puerto Rico service is independent of those transactions, and the Company intends to cease operations between the U.S. and Puerto Rico whether or not the transactions with Pasha and Matson are consummated.
Matson enters the Alaska market, Pasha takes over Horizon’s runs to Hawaii and Horizon folds its Puerto Rico operation. I wish Tim Colton was still commenting as this was something I know he was very insightive towards.
WOW is all I can say!
I believe this article sums up Horizon’s position pretty well…they had to die!
Nov 11, 2014, 7:06pm EST
Jensen Werley
After 58 years of operation, Horizon Lines will cease operations by the beginning of next year.
Mike Avara, chief financial officer for Horizon, told the Business Journal that the company was simply unable to keep running.
For a long time, he said, Horizon tried to improve their operations in Puerto Rico, to which it had been shipping since 1958. The island’s economic woes made that difficult, however: Since 2006, it has been in a recession. The official unemployment rate is more than 14 percent, and only a third of residents have jobs.
See Also
Horizon Lines to shut down Jacksonville-to-Puerto Rico trade lines Horizon Lines: sell some markets, or go bankrupt In financial distress, Horizon Lines may look to sell Puerto Rican business
Avara said the company tried to do what it could, but shutting the line down was the only conclusion.
“It was a very difficult decision to shut down the Puerto Rico business,” Avara said.
Horizon Lines has had a rocky history for years. The company, which was delisted from the New York Stock exchange in 2011, had been bought and sold by several private equity firms. Several years ago, it (and several of its competitors) was fined heavily the same year for price-fixing.
Analysts and industry insiders have been speculating that this could happen. This summer, those worries began ramping up, with several analyst noting the company could be in real trouble.
One indicator it was in dire straits was the age of its fleet — an average of 37 years. The ships would need to be updated to meet regulations by 2020, an endeavor that would have cost from $200 million to $1 billion.
On top of an aging fleet, Horizon also had a debt problem. It has accrued more than $100 million in interest and debt obligations due in 2014 and 2015 and over $600 million in obligations due in 2016. Its fleet was valued at only $215 million.
Two of Horizon’s main competitors in the Puerto Rican market — Sea Star Line and Crowley Maritime Corp. — are Jacksonville-based. Both are making major investments in new LNG-powered vessels that would serve the island.
“We at Crowley are committed to the market,” said Mark Miller, director of communications at Crowley. “We’re making the necessary investment in new ships, the first of which is under construction.”
He added that the company is currently seeking proposals to build a new pier with container cranes in Puerto Rico to serve the new ships.
As to whether the shutdown of Horizon will affect his company, Miller said he would not speculate.
“I think everyone will see how it all shakes out,” Miller said. A representative from Sea Star also declined to comment.
In addition to ending its long-standing business in Puerto Rico, the company is selling off its assets in Alaska and Hawaii. Operations in Alaska will be acquired by Matson Inc. for $456.1 million and its Hawaiian trade as been bought by the Pasha Group for $141.5 million.
Avara said the company will provide a transition to its customers in the Puerto Rican trade until business ends at the end of its year, and will continue running Horizon ships in Alaska and Hawaii until the transactions are approved in 2015.
Once all deals are finalized and the customers are transitioned, that marks the end.
“If everything goes through,” Avara said, “there really won’t be a Horizon any longer.”
I’d say that one should expect Pasha to perhaps announce for some more newbuild pretty darned soon…the same Ro/Con ships that Crowley is having Halter build would suit the Hawaii trader well…
[QUOTE=awulfclark;147765]Matson and Horizon are both MMP deck and MEBA engine. Pasha, however, is AMO for deck and engine. So, it seems likely that MMP and MEBA will lose jobs in the Hawaii trade. Also don’t forget they’re going to lose jobs on the Puerto Rico run, and those jobs aren’t likely to be replaced by anybody.[/QUOTE]
well, I’m sure all those career USEC Horizon Lines mates who have been accustomed to overnight port stays, barrel watches, minimal paperwork, laissez faire practices and the general good life will have absolutely no problem adjusting to the sand box and Singapore runs of USEC MLL and APL. No port time, no direct TV, shit loads of paperwork, up to 7 cranes at a time and port state control crawling up your ass on a regular basis.
Should be a seamless transition.
And oh yeah, all those abundant, unfilled OTB jobs are most likely a thing of the past.
The next shoe to drop will be the Watson class going on ROS; then the douches on the GEB will realize they let too many people bump up to “A” book.
Good times ahead…
[QUOTE=Johnny Canal;147770]
And oh yeah, all those abundant, unfilled OTB jobs are most likely a thing of the past.
The next shoe to drop will be the Watson class going on ROS; then the douches on the GEB will realize they let too many people bump up to “A” book.
Good times ahead…[/QUOTE]
The GEB, looking out for the members best interests? You’ve got to be joking.