THE COLD HARD FACTS

THE COLD HARD FACTS

Some years back, I got my knuckles firmly rapped for suggesting that only ice-strengthened ships could navigate in and out of Montreal during the winter.

When I commented that ships with strengthened hulls meeting the criteria of Ice Class notification were the only vessels that could safely transit the St. Lawrence, I was inundated with objections. I had my shipping credibility questioned, and was charged with being misinformed and in possession of limited shipping knowledge - and that was only the beginning!Norasia Lines was in the Montreal-Europe trade at the time. Executives in Fribourg informed me in no uncertain terms that a shipping line doesn't need to deploy Ice Class ships in that trade. The fact that some months later the company decided to pull the plug on the service with non-ice-strengthened ships, I learned, was the result of commercial, not technical considerations.

The euphoria surrounding the Norasia Canada gateway occurred about the same time that Maersk, along with its alliance partner at the time, Sea-Land Service Inc., and P&O Nedlloyd, were entering the Montreal-Europe market. When these carriers employed ice-strengthened ships, I felt justified in my beliefs. But last week's news that Maersk Sealand and P&O Nedlloyd are dumping the ice-strengthened ships for conventionally built vessels has thrown me into a state of utter confusion. For we now know that beginning in late July, these lines will operate at least two non-ice-strengthened ships in their three-ship service. According to Maersk Sealand, ''We don't normally charter ships for short-term periods.'' It could be that the charters run through the winter months. It could also be that if the going gets tough, Maersk Sealand and P&O Nedlloyd will transfer an ice-strengthened trio to the trade from elsewhere.

But the truth is, with everything that can complicate vessel scheduling and deployment, why would you risk problems later if they can be avoided now? The big players on the Europe-Montreal service are Canada Maritime, OOCL and Cast. The lines together operate three strings in a vessel-sharing consortium. There are nine ships in total on the three strings, six of which were built to withstand ice, and three converted for that purpose. All are ice-strengthened to the highest classification society standards.

The new vessels are believed to have cost around 10 percent more to build than identical non-ice-strengthened ships. In today's market, that means around $4 million more, based on a projected 25-year-life span. The conversion costs ran to around $1.8 million per ship when Canmar first bought them from Mitsui O.S.K. Lines in the mid-1990s.The Canmar-OOCL-Cast service works on schedule reliability. Canadian Pacific and OOCL are the only two companies around today to have built ice-strengthened ships with a specific trade in mind.

Given the life span of their fleet, $10 million extra is of little consequence if you can't keep your customers satisfied. You need to be able to plow through thick ice without calling for icebreakers. And if your customers ask for a direct service to and from Montreal, they don't want to find their cargo diverted to Halifax or St. John where they must wait for railcars.

Well that seems to be the CP-OOCL logic anyway. These carriers have been in this trade a long time, so we have to assume they know what they're doing. No one can doubt the credence of Maersk Sealand and P&O Nedlloyd, of course, but their Montreal experience is limited by comparison. They came in three years ago with three ex-Russian ships - built in the 1980s, guaranteed 19 knots service speed, ice-strengthened.

For these ships, 19 knots was a bit hard to achieve. Ironically, the ships are similar to the Mor Line ships that disappeared from the trade late last year. Port schedules were adjusted to compensate for the slower speed, but it would appear customers were none too pleased. So like all blue chip lines, operations were examined and changes were made to accommodate needs. That demand was met with ships available on the instant charter market, not ordering vessels that would take two years to build. There are few ice-strengthened ships out there on the charter market, and those that are available command a much higher premium in daily rates.

So with that in mind, it's time to answer the question. Are ice-strengthened ships necessary on the St. Lawrence in mid-winter? We'll soon find out. What is apparent is that you should build ships to suit the trade. It may cost more initially, but you reap rewards later. If you are a newcomer, and you don't have the ships, you charter them. If you can't charter them, then you borrow something else, and you hope for the best. Canada Maritime, Cast and OOCL may have learned the hard way -- a lesson for Maersk Sealand and P&O Nedlloyd.

By the way, when was the last really harsh winter on the St. Lawrence? I don't remember.