Duty repeal results in more Canadian ships that sail Great Lakes being built abroadLater this month the Canada Steamship Lines’ newest laker, the Baie St. Paul, will arrive in Superior to load iron ore bound for Quebec.
By: Steve Kuchera, Duluth News Tribune
Later this month the Canada Steamship Lines’ newest laker, the Baie St. Paul, will arrive in Superior to load iron ore bound for Quebec.
The vessel is more than just a new ship for area boat watchers to be watching for: It is part of a major updating of the Canadian fleets using the Great Lakes St. Lawrence Seaway System.
“There is a total of around 30 ships that are under construction or under contract for construction right now for the St. Lawrence Seaway,” said James Sharrow, Duluth Seaway Port Authority facilities manager. “It is a real building boom.”
The building boom is fueled in large part by Canada’s 2010 repeal of a 25 percent duty on ships built abroad.
In August 2011, the Algoma Central Corp. christened the 740-foot-long Algoma Mariner — the first new Canadian flag dry-bulk carrier on the lakes in 27 years. Built in China, one of the ship’s first voyages took coal from
Superior to Nova Scotia.
That same year, a Chinese shipyard began building the Algoma Equinox, the first ship in a new class of lakers. The Algoma Equinox was launched Dec. 24 and is expected to begin working the lakes this year. By the end of 2014, seven additional Equinox-class vessels are expected to join the
Like the Algoma Equinox, the 740-foot-long Baie St. Paul is the first of a new class of vessels being built in China. Canada Steamship Lines has ordered three additional Trillium-class self-unloading lakers. The Baie St. Paul is the CSL’s first new laker in 27 years.
The Equinox and Trillium classes share some similarities. At 740 feet long, the ships are “Seawaymax” vessels — the largest that can fit through the canal locks of the St. Lawrence Seaway between the Great Lakes and the Atlantic Ocean. Larger lakers cannot fit through the Welland Canal — which bypasses the Niagara River — and are restricted to Lakes Superior, Michigan, Huron and Erie.
And, “being new ships, they are able to take best advantage of refinements in technology, to be more efficient and to have a smaller environmental impact,” said Sharrow, former engineering and maintenance director for Great Lakes Fleet who also has worked as a consultant in naval architecture and marine engineering.
The ships, which cost about $50 million each, have the latest engine technology and hull design to decrease air pollution and increase fuel efficiency. Algoma Central Corp. estimates its Equinox vessels will be 45 percent more energy-efficient than its current fleet average. Canada Steamship Lines estimates the Baie St. Paul engines will save about 750 tons of fuel per year.
Modern engines will last longer with less maintenance. Exhaust scrubbers reduce sulfur dioxide emissions by up to 97 percent, allowing the vessels to use lower-cost fuel while meeting air-quality standards.
The Baie St. Paul was built in Jiangyin, China, and began its maiden voyage to Canada on Oct. 5. To safely cross the ocean, the ship was fitted with temporary reinforcing that was removed after it arrived in the Port of Montreal on Dec. 1. In late December it arrived in Duluth for a load of iron ore.
In November — while still at sea — the Baie St. Paul received the 2012 Bulk Ship of the Year Award at the International Bulk Journal’s annual event in Germany. The Royal Institution of Naval Architects also selected the Baie St. Paul as one of its Significant Ships of 2012.
“The Baie St. Paul represents an important milestone for CSL and for the evolution of shipping in the Great Lakes,” CSL President Louis Martel said. “Her outstanding environmental and operational performance is a testimony to CSL’s ongoing commitment to customers and the communities in which we operate.”
Algoma and Canada Steamship Lines are not alone in ordering new ships; Montreal-based Fednav Group has received or ordered nine new lakes vessels since 2011, including six ordered from Japan’s Oshima shipyard. Fednav operates a fleet of Seaway-sized bulk carriers that carry cargos between the Great Lakes and ports overseas, including the Federal Hunter and Federal Elbe — the first two salties to reach the Twin Ports this year.
While Canadian fleets are seeing a major expansion of new vessels, U.S.-flag fleets are not.
“We don’t have to build new because our vessels never leave the lakes, so they spend their entire careers in freshwater,” avoiding saltwater corrosion, said Glen G. Nekvasil, vice president of the Lake Carriers’ Association, which represents American businesses operating 57 U.S.-flag lakers.
“Basically, what we do, as business conditions permit, is upgrade the vessels,” Nekvasil said. “A number of vessels have been repowered recently. In previous years we lengthened vessels, converted them to self-unloaders.”
Owners spend upward of $60 million each winter maintaining and upgrading U.S.-flagged lakers, he said.
The association likes to use the Cason J. Callaway as an example of what caring for and reinvesting in a ship can do.
When launched in 1952, the ship was 629 feet long and could carry 22,064 tons of cargo. In 1974, the vessel was lengthened by 120 feet, increasing its capacity to 28,336 tons. In 1982, the ship was converted to a self-unloader, allowing it to make more trips each year. In 2002 its engines were updated. The ship visited the Twin Ports 16 times during the last shipping season.
In recent years owners have upgraded engines in several lakers — including the Paul R. Tregurtha, H. Lee White and Indiana Harbor in 2010, the Edwin H. Gott in 2011 and the Kaye E. Barker in 2012.
“You can achieve about 90 percent of the economies of a new build (ship) just by repowering a vessel, and in the process save about 75 percent of the cost,” Nekvasil said.
In addition to installing new diesel engines, there is a chance some ships will convert to using clean-burning LNG. The Great Lakes Maritime Research Institute is working to determine whether it’s feasible to convert to natural gas 10 bulk carriers that generate steam by burning fuel oil.
American ship owners do not have the option of having lakers built overseas — the Jones Act requires that cargo transported by water between U.S. ports be carried in U.S.-flag ships built in America.
The Lake Carrier Association has no problem with that requirement, Nekvasil said.
“When there has been a demand for new vessels, we have built them,” he said.
The last American self-propelled laker — the Columbia Star, since renamed the American Century — was built in 1981. The tug/barge Ken Boothe Sr./Lakes Contender was built in Erie, Pa., and christened in May.