The CSL Group has confirmed a $514m order for 10 self-unloading bulk carriers from China’s Chengxi Shipyard, in what will be the company’s largest fleet renewal programme.
“They are complicated vessels and different from a standard carrier in that they have self-unloading equipment, including a bulk conveyor system in the bottom of the cargo holds with a boom. This adds about $16m-$18m to the cost of the ship over a straight traditional bulker,” said Canada Steamship Lines president Gerry Carter.
The order is for three panamax vessels with an option for a further three, and two handysize vessels with an option for a further two, although the exact configuration has yet to be determined.
The panamaxes were priced at $55m per ship and the handies at $46m per vessel, Mr Carter said. The CSL Group includes divisions operating not only in the Great Lakes and St Lawrence Seaway, but also internationally and in Australia. CSL has a fleet of 11 self-unloading vessels and eight bulk carriers, operating in domestic trades.
Paving the way for the fleet renewal programme is a yet-to-be implemented Canadian government policy, to ease the financial burden of importing foreign-built ships to work in local waters.
“There is a 25% import duty that the Canadian federal government last October announced it would be working towards the removal of in the spring of 2010, retroactive to January 1, 2010,” Mr Carter said.
“They have gone through all the consultations and the recommendations are there, but it still has not been enacted and that is one of the things that can influence the type of ships we are building.
“Should the government live up to its commitment those handy ships could be done as ocean-class ships operating in either CSL International or Australia, rather than in the Great Lakes in cabotage,” he added.
As a result, no decision has been made yet about where the ships will be deployed.
It is generally anticipated that protectionism is no longer relevant, paving the way for many other vessels operating on the Great Lakes to be replaced with younger foreign-built tonnage.
The Chengxi Shipyard won a $120m contract in 2007 to replace and upgrade the forebodies of four panamax bulk carriers for the CSL Group, under which new sections are attached to the existing parts of the vessel. This followed replacements for four Laker vessels undertaken at Canadian shipyards back in 2000 and 2001.
“Not everyone is familiar with building this kind of ship and Chengxi has done a number of conversions for us,” said Mr Carter.
“The stars are aligning in both [newbuilding] prices and the market is starting to restabilise. There has not been a new ship built in Canada in 26 years. Doing forebodies will only get you so far because you are still dealing with an old engine room.”
He added that the newbuildings would also allow the CSL Group to move its environmental programme forward.