More Bad News from Horizon Lines

From Tim Colton’s excellent website

More Bad News from Horizon Lines

More terrible numbers from Horizon Lines, which all on its own makes you want to give up on the Jones Act. In the first quarter, they lost $20 million on sales of $244 million. Read their announcement here. The unavoidable fact is that Horizon Lines has absolutely no way of getting out of the bog in which it has become stuck. None. Chapter 7, here they come. Then somebody competent can buy their terminals and take over their cargoes. May 3, 2013.

How does this company manage to keep going losing the kind of money they do?

Mismanagement and old equipment? This would be a prime acquisition for well managed company (IE: Crowley or Tote Services) to step in and capitalize. Although it would require a large capital investment to replace the geriatric tonnage.

[QUOTE=highseasmechanic;108479]Mismanagement and old equipment? This would be a prime acquisition for well managed company (IE: Crowley or Tote Services) to step in and capitalize. Although it would require a large capital investment to replace the geriatric tonnage.[/QUOTE]

Hell, at this point who’s to say Kirby won’t buy them? They’re willing to snatch up everything else, and what’s more they used to have some U/L blue water boats not so very long ago.

[QUOTE=highseasmechanic;108479]Mismanagement and old equipment? This would be a prime acquisition for well managed company (IE: Crowley or Tote Services) to step in and capitalize. Although it would require a large capital investment to replace the geriatric tonnage.[/QUOTE]

Well, I certainly can say that only pieces would be attractive to Saltchuk since they are already in Anchorage (TOTE) and San Juan (SeaStar Line) but the Kodiak and Dutch Harbor service would be good to add and of course, the Hawaii service with all the terminals on the West Coast and Honolulu. Use the three 1980’s containerships in the Alaskan triangle run and just use the best of the steamers long enough only to build new LNG powered ships at NASSCO then scrap the fuel guzzling beasts as fast as possible when the new ships are delivered.

As far as Crowley goes, I am not sure if this is what they would want to do. Much harder for them to integrate the relatively small scale Trailer Bridge and Hydro-Train into a true liner ship operating company. Saltchuk is way ahead of them there.

[QUOTE=PaddyWest2012;108481]Hell, at this point who’s to say Kirby won’t buy them? They’re willing to snatch up everything else, and what’s more they used to have some U/L blue water boats not so very long ago.[/QUOTE]

KIrby has never owned any Ro Ro’s or box boats. They did own a few tankers several years ago, but they got out of the deep draft business, in the middle 90"s. I think they sold the last ones around 95 or 96. They also have never owned any dry bulk rigs except for a small fleet of tugs. Even at there peak they only owned 7 dry bulk rigs. I used to be the chief on the biggest dry bulk ATB they owned until they sold it out from under me in 1999. I have made this statement several times before. I was there when Kirby decided to sell out all the offshore fleet and concentrate on it’s inland business. They got shut down by the guvment and told they can’t buy anymore inland companies, now 15 years later they are trying to buy everything that floats that is redflag offshore. Nothing personal but I hope they go effing bankrupt. The only good thing to come out of the whole deal is I will get a chicken shit pension from them when I retire if they don’t go bankrupt first.

[QUOTE=c.captain;108484]Well, I certainly can say that only pieces would be attractive to Saltchuk since they are already in Anchorage (TOTE) and San Juan (SeaStar Line) but the Kodiak and Dutch Harbor service would be good to add and of course, the Hawaii service with all the terminals on the West Coast and Honolulu. Use the three 1980’s containerships in the Alaskan triangle run and just use the best of the steamers long enough only to build new LNG powered ships at NASSCO then scrap the fuel guzzling beasts as fast as possible when the new ships are delivered.

As far as Crowley goes, I am not sure if this is what they would want to do. Much harder for them to integrate the relatively small scale Trailer Bridge and Hydro-Train into a true liner ship operating company. Saltchuk is way ahead of them there.[/QUOTE]

Very good point. I would have to agree that Saltchuk is better positioned, with the right business model, and capital to pull it off. Will be interesting to see what happens.

[QUOTE=highseasmechanic;108493]Very good point. I would have to agree that Saltchuk is better positioned, with the right business model, and capital to pull it off. Will be interesting to see what happens.[/QUOTE]

Well, Horizon Lines still hasn’t crashed and burned yet so we still have to wait for that one to occur and the resultant fallout as the bankruptcy court sells off the assets for whatever their worth to the highest bidders.

Why wouldn’t Matson throw their hat into the ring?

[QUOTE=rshrew;108542]Why wouldn’t Matson throw their hat into the ring?[/QUOTE]

Aren’t Matson and Horizon the two cornerstones of the Hawaiian trade? I can see some anti-monopoly suits cropping up there.

[QUOTE=PaddyWest2012;108544]Aren’t Matson and Horizon the two cornerstones of the Hawaiian trade? I can see some anti-monopoly suits cropping up there.[/QUOTE]

what does Horizon have that Matson doesn’t have already but wants? Would Matson be at all interested in Alaska or PR? I wouldn’t think so but?

I still want to see Saltchuk be the winner take all once Horizon implodes. They can rebuild the whole Horizon mess and rebuild it right this time. Modern US built ships running on LNG!

I’m not criticizing here, I’m genuinely interested, why the interest in LNG? I saw you mention it in the short-sea thread and I would like to hear your thoughts on the development of LNG power in modern shipping.

I was figuring if horizon fizzles that matson would try to break into Alaska.

[QUOTE=PaddyWest2012;108555]I’m not criticizing here, I’m genuinely interested, why the interest in LNG? I saw you mention it in the short-sea thread and I would like to hear your thoughts on the development of LNG power in modern shipping.[/QUOTE]

LNG powered short route ships are vastly better that MDO, MGO or even IFO in terns of cost of operations, emissions, longer life of machinery. Its time has arrived and it makes nothing but sense for newbuilds not on very long runs to be LNG fueled. For ships going trans oceanic, the economics still favor IFO.

[QUOTE=c.captain;108559]LNG powered short route ships are vastly better that MDO, MGO or even IFO in terns of cost of operations, emissions, longer life of machinery. Its time has arrived and it makes nothing but sense for newbuilds not on very long runs to be LNG fueled. For ships going trans oceanic, the economics still favor IFO.[/QUOTE]

Just think of all of the new Jobs for AMO!

Now that should get the old blood pressure up on our beloved c.captain. Sorry I just could not help myself. :slight_smile:

[QUOTE=Tugs;108566]Just think of all of the new Jobs for AMO!

Now that should get the old blood pressure up on our beloved c.captain. Sorry I just could not help myself. :-)[/QUOTE]

you’re right that as much as I love Saltchuk Resources, I wished to hell they didn’t contract with the AMO and SIU for their vessel crews but they are a business to make profits so how can you blame them for going with the easy unions to do business with?

oh well, it would be the same with Crowley taking over the Horizon services or Maersk for that matter so no matter what the MMP and MEBA are gonna be losing a whole lotta jobs soon. Do you know the APL C-10’s are all going to scrap? Some American President Lines when there ain’t much “American” left to them. What a sad joke that so many the old guard US flagged shipping companies had to die or be bought by foreigners to survive. Very few true Red, White and Blue liner companies left these days. Saltchuk is all American tho!

.

I dig the LNG stuff how and where are they going to fuel these things?

[QUOTE=“c.captain;108548”]

what does Horizon have that Matson doesn’t have already but wants? Would Matson be at all interested in Alaska or PR? I wouldn’t think so but?![/QUOTE]

Matson would love to get possession of Horizon’s Honolulu pier and yard area. The rest of Horizon they don’t need, but that extra space is a wet dream for them.

[QUOTE=“rshrew;108556”]

I was figuring if horizon fizzles that matson would try to break into Alaska.[/QUOTE]

Matson has been sniffing around in Alaska for years looking for a good opportunity.

Little LNG bunker vessels

[QUOTE=fullbell;108576]Matson would love to get possession of Horizon’s Honolulu pier and yard area. The rest of Horizon they don’t need, but that extra space is a wet dream for them.[/QUOTE]

I doubt that would happen based on monopoly concerns…

Matson will not be allowed to take over Horizon’s Hawaii service. I do have to wonder about Pasha though? I wonder if they might bid for Horizon’s West Coast and Honolulu terminals and the equipment? I still want Saltchuk tho.