Great Lakes fleet expansion

rushie
9th June 2006, 10:38
Maritime press release -

American Steamship acquires six freighters for $120 million

Purchase brings its lakes fleet to 18 vessels

American Steamship Co. has bolstered its fleet by acquiring six vessels for $120 million.
The Amherst-based company bought the vessels from Oglebay Norton Marine Services in Cleveland, expanding its fleet to a total of 18 vessels. American Steamship already had the largest U.S.-flag fleet on the Great Lakes prior to the deal.

Oglebay Norton is selling six of its nine freighters, to pay down debt and strengthen its balance sheet. American Steamship earlier this year was identified as a potential suitor for the ships.

For American Steamship, the sale increases its fleet in each of three classes of vessels, said Rhonda Johnson, a spokeswoman for GATX Corp., American Steamship's Chicago-based parent company. "It adds to each of the segments."

While American Steamship is stepping up its presence on the Great Lakes, Oglebay Norton is shifting away from marine shipping to its mining business. Oglebay Norton says it is in talks with an undisclosed party to sell two of the remaining vessels and transfer its leasehold interest in a third ship.

The deal with American Steamship includes long-term contracts for transporting limestone from Oglebay Norton's Michigan quarries, the Cleveland company said. American Steamship has also agreed to hire Oglebay Norton's vessel employees.

American Steamship and Oglebay Norton have had a business relationship since 2002, when they formed a "shipping alliance." That arrangement has allowed them to pool their vessels into one fleet to achieve economies of scale, while maintaining separate ownership.

American Steamship has been operating on the Great Lakes since 1907, transporting dry bulk commodities including iron ore pellets, coal and limestone aggregates. It has been owned by GATX Corp. since 1974.

The Lake Carriers Association reported that in 2005, U.S. flag vessels moved 107.7 million tons of dry-bulk cargo on the Great Lakes, down 3.3 percent from the previous year. Coal shipments were up, while limestone and iron ore shipments were down.

Rushie