Canadian shipowner Fednav has signed up for 10 lakes-fitted bulker newbuildings as part of the company’s fleet-renewal program. The Montreal-headquartered bulker company said it has signed an agreement with Oshima Shipbuilding for the 34,500-dwt newbuildings. The deal also involves Sumitomo Corp shipping arm Sumisho Marine, which handles Oshima’s newbuilding deals. Fednav is scheduled to take delivery of the first vessel in mid-2023.

Chief executive Paul Pathy said the order for the super-eco laker newbuildings is aimed at replacing the company’s vessels that will be retiring over the next few years. Pathy said: “Fednav’s long-term plan is to grow and expand. But these 10 newbuildings are replacement ships.” He added that the new Fednav-Oshima designed laker newbuildings will be the most efficient vessels to date for the company. “Their carbon emissions will be 33% less than the vessels they will replace, including a NOx footprint at least 87% smaller,” Pathy said. “They will be delivered equipped with the latest technology, including Tier III engines and the capability of burning biofuels. The new lakers will support Fednav’s sustainability goals, making them an essential asset for the future.”

He said the ships reinforce the company’s commitment to the Great Lakes St Lawrence Seaway, a waterway along the US-Canadian border that connects the lakes system to the Atlantic. “These new vessels are aligned with our long-term strategy to invest in our future and support our transition towards more sustainable shipping,” Pathy said. He acknowledged that it is controversial to have ordered so many conventionally fueled vessels. “But these ships are able to burn biofuels,” Pathy said.

He added that Fednav’s corner of the industry is not ready for carbon-free fuels. Pathy said that the ports where Fednav vessels call are small and do not have ammonia or hydrogen supplies. “For the smaller bulk carriers, they don’t have the space for the tanks to store hydrogen or ammonia,” he said. Pathy said Fednav’s fleet is “scattered around the world” and his company must ensure that there is fuel supply for the bulkers.

A lot of shipping companies are adopting a wait-and-see approach as they watch for the next alternative fuel ships that will be available in the industry. “But for Fednav, the ships are our core business,” he said. “We cannot afford to get into a situation that when two years down and when we make that decision, it would be too late as berth slots are not available or the shipbuilding cost is too high,” he said. “All we can do for now while waiting for the next generation of ship is to make sure our newbuildings are as fuel efficient as possible and try to be the best in the world with this type of vessels.”

Pathy did not disclose the cost of the new bulkers. “When we negotiate the deal, we have to make a number that we can afford and make sense for our business for the next 20 years,” he said. “If we are to wait for another year, the price may not be sustainable. I cannot take the risk of not being able to afford to renew our fleet.” Pathy thinks he has made the right decision in ordering oceangoing lakers in today’s market. “The vessels were negotiated several months ago before the major increase in commodity price,” he said. “These will not be the cheapest ships to [be] delivered but they are a good number for us and good number for Oshima.”

Pathy is pleased that the dry bulk business is making a comeback, especially when the sector “was in a complete disaster” in the first half of last year due to Covid-19. “It is exciting and personally I do not know how long the good market will last,” he said. “I am hearing that it could last for a few years.” But he said the shipping industry is volatile, and predictions do not matter. “You make hay while [the] sun shines,” he said. “The shipping industry is about management of cycles and trying to make the right decision in the right cycle is the next step.”