Industry's survival credited to self-unloaders.

• Author: Krejlgaard, Chris
• Position: Shipping industry - Transportation Report - Industry Overview

Efficiency overcomes poor prices

Even though 1991 has been a good year for the shipping industry on the Great Lakes, a pair of Northern Ontario companies credit the use of self-unloading ships with the survival of the firms.

"No doubt about it. If it wasn't for the self-unloaders we would be out of business," commented Lou Quinlan, president of Sault Ste. Marie-based A.B. McLean Limited.

Quinlan's firm hired between 35 and 50 ships this year to haul its aggregates to destinations along the Great Lakes. Calling 1991 a good year, Quinlan said that during the first 10 months the firm hauled approximately 700 tons of constructive aggregates.

Without the self-unloaders the company would not be able to compete with other firms in the industry, according to Quinlan.

Dennis McPhee, the supervisor of marketing and sales for Algoma Marine, a firm hired by A.B. McLean, said the use of self-unloaders has also made the difference for his operation, a division of Algoma Central Corporation. Of the division's fleet of 18 vessels, 12 are self-unloaders.

"Without them we'd be in trouble," McPhee commented, noting that the division competes against a formidable U.S. Great Lakes fleet, a fleet which is exclusively self-unloaders.

What separates self-unloaders from other Great Lakes ships, known as bulkers, is that they are fitted with a conveyor system which allows them to be unloaded with a minimum or, in some cases, no dock-side unloading facilities.

"You just swing a 250-foot boom out and start unloading," McPhee quipped.

The system does carry a hefty price tag. Refitting a ship to become a self-unloader can cost a company between $15 million and $20 million, while a new ship can cost between $35 million and $50 million. The relatively high cost forced one Thunder Bay shipping firm to decide against converting some of its fleet to self-unloaders.

"It's just too costly, and it's the wrong time to do it," explained Robert Paterson, president of Western Engineering Service Ltd. and executive vice-president of N.M. Paterson and Sons Ltd.

Paterson said uncertainty in some of the commodity markets makes instituting a conversion program a risky proposition.

While the self-unloaders offer shipping companies more flexibility in delivering goods, it is primarily restricted to use for bulk commodities such as iron ore, potash, limestone and salt. Depending on the commodity, the vessels can...