[QUOTE=RichM;147773]The GEB, looking out for the members best interests? You’ve got to be joking.[/QUOTE]
Of course I am. The only thing they give a damn about is the pensioners, not the active members.
SUP and MFOW get the jobs with Matson. Those 27 y/o SeaLand ships weren’t the greatest ride in the Gulf of Alaska winters(718x78-they had to transit the St Lawrence Seaway after construction), but the only other ships were TOTE and tankers. Those were my bread and butter back in the 90s. Wouldn’t mind doing that run again, especially as most guys hate the winter. Very early speculation, but wonder if Matson would have any kind of plan to replace those ships. Is Matson still in Seattle or have they moved down to Tacoma? Do they take over Horizons terminals in Tacoma? Haven’t been there since '97. Looking forward to this development.
This new turn of events could spur some new container or Con/Ro vessel construction. Would be nice to see some new tonnage come to the US cargo fleet.
[QUOTE=Texaco;147876]SUP and MFOW get the jobs with Matson. Those 27 y/o SeaLand ships weren’t the greatest ride in the Gulf of Alaska winters(718x78-they had to transit the St Lawrence Seaway after construction), but the only other ships were TOTE and tankers. Those were my bread and butter back in the 90s. Wouldn’t mind doing that run again, especially as most guys hate the winter. Very early speculation, but wonder if Matson would have any kind of plan to replace those ships. Is Matson still in Seattle or have they moved down to Tacoma? Do they take over Horizons terminals in Tacoma? Haven’t been there since '97. Looking forward to this development.[/QUOTE]
And Matson uses SIU for the steward department. Horizon used SIU for all unlicensed. Holy Matson unions, Batman!
I would guess Matson would have to have some sort of plan for new tonnage on the Alaska run. Does anyone know if Matson has spare tonnage and if those ships would be capable of transiting Cook Inlet in the winter (to say nothing of the Gulf of Alaska)? Matson still operates out of Seattle, specifically Terminal 18 on Harbor Island. Not sure if they would run their Alaska ships out of Seattle or use Pier 7 in Tacoma like Horizon does currently. My guess, and this is completely my own speculation, is that they’d run Horizon’s D-7s at least short term while they build new tonnage. New tonnage, by the way, would require new cranes in Anchorage, as the cranes there currently (except one) are sized exactly to the D-7s. Horizon had some built a few years ago but I’m not sure they have them anymore.
As far as Hawaii goes, Pasha is getting ready to deliver a second ship. Right now they run out of San Diego. I don’t know much about Pasha–I don’t think they were really involved in shipping directly until the [I]Jean Anne[/I] began running back in 2005. Obviously they did well enough to build a second ship. Is there really that much cargo demand for Hawaii, or were they betting on Horizon’s eventual demise? Either way, it remains to be seen if they’ll be introducing additional tonnage to the run. Does Pasha have deep-enough pockets to build new tonnage? Again, complete speculation on my part, but I could envision a scenario where they partner with Saltchuk/Tote Maritime on that run. Tote Services already provide crewing services (but little else) to Pasha, but there’s at least some relationship there already.
Obviously all the details are going to take some time to shake out. It’ll be very interesting to see how all this shakes out. Ought to keep the US shipyards busy for quite some time!
Matson will very like continue running the D7’s. They currently have 2 ships under contract to be build at Aker to the tune of $400 million. As they still run steam ships the new ones will probably replace those. Matson will need to watch their debt load so I doubt if more new ships will be built for awhile. At least not until the ports in Alaska are upgraded. As far as the terminals go the one Horizon uses in Tacoma is a lease arrangement with APM. Don’t know the terms of that lease but Matson will probably move everything to their own terminal in Seattle when they can.
Don’t know much about Pasha other than they really wanted Horizon’s Terminal in Honolulu. Matson was doing its best to limit any available terminal space in Honolulu. Horizon’s LA to Hono run has been carrying good cargo loads almost since the runs inception not to mention the loads out of Oakland (again a APM terminal). This is a plus for Pasha the question is what they will do with the ships.
[QUOTE=Chief Seadog;147898]Matson will very like continue running the D7’s. They currently have 2 ships under contract to be build at Aker to the tune of $400 million. As they still run steam ships the new ones will probably replace those. Matson will need to watch their debt load so I doubt if more new ships will be built for awhile. At least not until the ports in Alaska are upgraded. As far as the terminals go the one Horizon uses in Tacoma is a lease arrangement with APM. Don’t know the terms of that lease but Matson will probably move everything to their own terminal in Seattle when they can.
Don’t know much about Pasha other than they really wanted Horizon’s Terminal in Honolulu. Matson was doing its best to limit any available terminal space in Honolulu. Horizon’s LA to Hono run has been carrying good cargo loads almost since the runs inception not to mention the loads out of Oakland (again a APM terminal). This is a plus for Pasha the question is what they will do with the ships.[/QUOTE]
That’s a very solid point. Matson is already assuming Horizon’s debt as part of this transaction, so yeah, they probably won’t want to be taking on even more debt. The D-7s are just about doing the job now. Port improvements in Alaska are unlikely; certainly the Anchorage port expansion is dead in the water, but that’s a completely different subject!
As far as Horizon’s terminal in Tacoma goes, you’re right about the lease from APM. It may be Matson will want to consolidate their operation in Seattle. But, looking at the logistics chain–most Alaska cargo goes out of Tacoma–it may make sense for them to continue leasing Pier 7.
I’m thinking Pasha came out the clear victor in this whole deal.
[QUOTE=awulfclark;147902]I’m thinking Pasha came out the clear victor in this whole deal.[/QUOTE]
only to the extent they get the Horizon Terminal on Sand Island, the containers, and accounts, but now they must decide what services they will provide to Hawaii and with what ships? We know they have a sister to the JEAN ANN coming but that is a pure Ro/Ro. Now they need to step up to the plate and decide if they intend to continue offering twice weekly service to Hawaii from both Oakland and LA or just one of the two? If only one, then they must immediately order four new ships to replace the miserable antiques Horizon has tried to operate for so many decades. If there is enough cargo from the mainland to Hawaii to support two California ports then they must order at least two more but no matter what, they are now behind Crowley to get delivery from Halter in Pascagoula. That means suffering with the miserable old steamers for at least three more years.
What about the two Horizon C-9 vessels were supposed to get the diesel repowers? Where to they fit into this news? Hopefully Pasha cancels this terrible idea and goes for newbuilds.
[QUOTE=c.captain;147907]only to the extent they get the Horizon Terminal on Sand Island, the containers, and accounts, but now they must decide what services they will provide to Hawaii and with what ships? We know they have a sister to the JEAN ANN coming but that is a pure Ro/Ro. Now they need to step up to the plate and decide if they intend to continue offering twice weekly service to Hawaii from both Oakland and LA or just one of the two? If only one, then they must immediately order four new ships to replace the miserable antiques Horizon has tried to operate for so many decades. If there is enough cargo from the mainland to Hawaii to support two California ports then they must order at least two more but no matter what, they are now behind Crowley to get delivery from Halter in Pascagoula. That means suffering with the miserable old steamers for at least three more years.
What about the two Horizon C-9 vessels were supposed to get the diesel repowers? Where to they fit into this news? Hopefully Pasha cancels this terrible idea and goes for newbuilds.[/QUOTE]
Horizon didn’t get the financing to do the repower work on the C-9’s. However the idea, engineering plans, and the cost estimates to do the work were pretty solid. Of all the ships Horizon had the C-9’s were the most trouble free and the steel on them is good.
[QUOTE=Chief Seadog;147912]Horizon didn’t get the financing to do the repower work on the C-9’s. However the idea, engineering plans, and the cost estimates to do the work were pretty solid. Of all the ships Horizon had the C-9’s were the most trouble free and the steel on them is good.[/QUOTE]
so how much did the estimates come in at? $40M per ship? more? what kind of speed were they going to make afterwards?
The numbers I heard were in the $40M-$60M range. Same speed or a little better.
[QUOTE=Chief Seadog;147915]The numbers I heard were in the $40M-$60M range. Same speed or a little better.[/QUOTE]
the question is how many years can you keep running those hulls to be able to amortize that investment in engines? If the hulls would be 35 years old when the work started and if it would take 5 years to pay off the conversion you are looking at 40 year old hulls before the work is paid for. You then need to keep operating more than 40 year old hulls for them to be fully amortized and making real profits. How many years can you do that? Doesn’t make sense…build new at $150M per ship. If you pay it off in 20 years, you still have at least 20 more years to operate them after they are fully paid for.
The only thing that makes sense to go for the repower is the lower up front costs but you gain nothing in the long game.
[QUOTE=c.captain;147916]the question is how many years can you keep running those hulls to be able to amortize that investment in engines? If the hulls would be 35 years old when the work started and if it would take 5 years to pay off the conversion you are looking at 40 year old hulls before the work is paid for. You then need to keep operating more than 40 year old hulls for them to be fully amortized and making real profits. How many years can you do that? Doesn’t make sense…build new at $150M per ship. If you pay it off in 20 years, you still have at least 20 more years to operate them after they are fully paid for.
The only thing that makes sense to go for the repower is the lower up front costs but you gain nothing in the long game.[/QUOTE]
If Matson’s ships are costing $200M+ your newbuild numbers might be a little low. Yes the hulls have a few years on them (34 at the moment 6 of which were spent laid up in Beaumont) but they are in very good condition as well as the tank coatings. The Discovery which was just sent to Brownsville was built ~ 46 years ago and its hull was in no where near as good a condition. The conversion can be done in less than a year versus 2, closer to 3+ for a newbuild. Pasha will get the ships. The question is what they will do with them. A ship’s hull can last as long as you want if as long as it is maintained, i.e., replace steel and keep the tanks in good repair. It is not the rust on the outside that kills a ship, it is the rust on the inside. The difference in cost between a conversion and a newbuild is quite a bit of change and pays for a lot of maintenance.
From what I’m reading, Pasha is only assuming Horizon’s debt on the Hawaii trade; Matson gets to deal with all the rest. The question is, just how much of Horizon’s debt is Hawaii-related? I really don’t know that much but I’ve always heard that Horizon’s Hawaii trade was at least a bit profitable, so I can’t imagine it’s that huge a chunk of money. I’ll be interested to see what Pasha does; in the short term I would assume they’d have to run Horizon’s old ships.
By the way, the [I]Marjorie C[/I] and the [I]Jean Anne[/I] are not the same; the [I]Jean Anne[/I] is straight ro-ro, but the [I]Marjorie C[/I] is Con-Ro.
[QUOTE=Chief Seadog;147917]If Matson’s ships are costing $200M+ your newbuild numbers might be a little low. Yes the hulls have a few years on them (34 at the moment 6 of which were spent laid up in Beaumont) but they are in very good condition as well as the tank coatings. The Discovery which was just sent to Brownsville was ~ 46 years ago and its hull was in no where near as good a condition. The conversion can be done in less than a year versus 2, closer to 3+ for a newbuild. Pasha will get the ships. The question is what they will do with them. A ship’s hull can last as long as you want if as long as it is maintained, i.e., replace steel and keep the tanks in good repair. It is not the rust on the outside that kills a ship, it is the rust on the inside. The difference in cost between a conversion and a newbuild is quite a bit of change and pays for a lot of maintenance.[/QUOTE]
Another question is cargo volume…operate ships slightly too small for the trade. Do like most of the airlines today and run planes too small for the number of passengers on the routes. This way planes are always flying at or near capacity, the airlines have lower capital costs and lower operating costs plus with demand exceeding space, you get to maximize your rates. If the demand grows enough to support the investment, Pasha just needs to build a couple more slightly too small ships for its fleet.
[QUOTE=c.captain;147921]Another question is cargo volume…operate ships slightly too small for the trade. Do like most of the airlines today and run planes too small for the number of passengers on the routes. This way planes are always flying at or near capacity, the airlines have lower capital costs and lower operating costs plus with demand exceeding space, you get to maximize your rates. If the demand grows enough to support the investment, Pasha just needs to build a couple more slightly too small ships for its fleet.[/QUOTE]
Not a bad idea in concept. But you have to look at the numbers. Take, for example, Seattle to Anchorage. Just today Alaska Airlines operated twelve flights on that route. Between Horizon and Tote there are four ships per [I]week[/I]. So, if Alaska Airlines gets a drop off in demand, they can simply take a plane or two off the route. When demand increases, put them back on. A shipping company would have to either let a ship sit idle, or lay it up–and we all know what it takes to lay up a ship and then reactivate it. In my mind it’s better to have a smidge of extra capacity, in anticipation of growth, rather than turn away customers. Obviously there’s a fine balance to be found.
[QUOTE=c.captain;147921]Another question is cargo volume…operate ships slightly too small for the trade. Do like most of the airlines today and run planes too small for the number of passengers on the routes. This way planes are always flying at or near capacity, the airlines have lower capital costs and lower operating costs plus with demand exceeding space, you get to maximize your rates. If the demand grows enough to support the investment, Pasha just needs to build a couple more slightly too small ships for its fleet.[/QUOTE]
Not to move the topic of this thread in another direction but if you leave your customers cargo on the dock he won’t be your customer very long. As a business you want to plan for growth, not limiting your growth. Otherwise the competition will end up cleaning your clock and you won’t be in business long.
[QUOTE=Chief Seadog;147960]Not to move the topic of this thread in another direction but if you leave your customers cargo on the dock he won’t be your customer very long. As a business you want to plan for growth, not limiting your growth. Otherwise the competition will end up cleaning your clock and you won’t be in business long.[/QUOTE]
not a problem…there are only two carriers and no one will go out of business is cargo lefts on the dock. one of the benefits of being in a protected trade
While there are significant benefits to being in a protected trade to say no one will go out of business is hazardous to those companies that think that. I wonder if Horizon had that mind set (though there are a number of reasons that put them in the situation they find themselves). Pasha started their Hawaiian service in 2005. Before that it was just basically Matson and Horizon. When Puerto Rican Marine (Navieros) went out of business Sea Star stepped in. Now Crowley is upping their presence there building ships to take over their barge operation. If others see a need you will get competition. Either new ones will enter or the existing competition will expand their capabilities.
[QUOTE=Chief Seadog;147968]While there are significant benefits to being in a protected trade to say no one will go out of business is hazardous to those companies that think that. I wonder if Horizon had that mind set (though there are a number of reasons that put them in the situation they find themselves). Pasha started their Hawaiian service in 2005. Before that it was just basically Matson and Horizon. When Puerto Rican Marine (Navieros) went out of business Sea Star stepped in. Now Crowley is upping their presence there building ships to take over their barge operation. If others see a need you will get competition. Either new ones will enter or the existing competition will expand their capabilities.[/QUOTE]
not so easy if you don’t have access to terminals…Pasha won big by getting Horizon’s Sand Island Terminal for cheap. There is nowhere for anyone else to go to other than Pier 5 which has no cranes. I am really surprised that TOTE didn’t want to go to Hawaii? They would have been a more obvious choice since Saltchuk already owns Young Brothers and HTB.
I too was surprised TOTE wasn’t the one to get Horizon’s Hawaiian trade. It would have been a natural fit to go head to head with Matson on the west coast. Pasha definitely seems to be the winner in that they got the Sand Island terminal. Their new ship has cranes to use if they had to but it would have been a lot slower operation.
Then again I would not be surprised if Matson told Horizon that if the Hawaiian assets were sold to TOTE the deal is off. If there is to be competition Matson would rather deal with Pasha than TOTE. TOTE is a much bigger company and has a lot more money to bring to the party with Saltchuk behind them.