Costco Bows Out

 The big box US retailer Costco has bowed out of ship chartering and has paid a big price for the experience.

In late 2021, frustrated with unreliable delivery dates and sky high shipping charges, Costco decided to charter three ships for three year terms at a quoted $42,000 per day each. They did so through the US shipping company Pasha Hawaii, as Costo had no in house ship operating experience. In March 2022 it was reported that they had charted four more ships for a total of seven. The ships would operate from China to the US east coast and Halifax, using a large supply of new containers rented from Triton for Costco's exclusive use. 

Carpathia was the first of the charters to call in Halifax.

Carpathia sails on August 23, 2022 loaded with new containers dedicated to Costco.

AS Carlotta in the Narrows October 15, 2022.It appeared to have a few light coloured - non-reefer - boxes in the mix.

 It was not long however before regret began to set in as cargo rates and ship charter rates collapsed during 2022. Nevertheless Costco claimed to have saved betwen $1,000 and $2,000 on 50,000 containers they transported on their "own" ships (about 20% of the company's needed capacity). Rates for containers on the transpacific peaked at about $40,000 and are now around $1,000 ($2,000 to the east coast). There is also an estimated glut of 5 million TEUs of idle containers world wide. To add insult to injury, the scores of new container ships to be delivered over the next two years will depress vessel values substantiallly, and increase pressure on rates.

 

 

Protostar N was in Halifax Nov 27, 2022, but by passed Halifax on its call in Baltimore February 5, 2023 and headed directly for the Mediterranean.

 In December 2022 Costco opted to exit the charters and pay early cancellation penalties of $93 million. All the ships were still underway or committed with Costco cargo, so the cancellations came into effect at the last US port, which seems to have been Baltimore.

What is to become of all the "several thousand" rented containers is a good question.

 The last ship under the charter is believed to be the Queen Esther which is due in Saint John, NB for March 3, 2023. It was also likely the last Costco charter to call in Halifax when it was here in December.

Queen Esther at Fairview Cove December 9, 2022.

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Post Blow - lift off

 With the return of calm conditions today the port was able to catch up on most of yesterday's delays. 

Among the arrivals was the first timer Protostar N for Costco's improvised shipping line.

Dissatisfied with the delays in ports and late deliveries from major shipping lines, Costco chartered its own ships and leased containers for its own exclusive use. The first of those ships to call here was the Carpathia on August 23 followed by AS Carlotta on October 15.

The Protostar N was built by Aker, with the forepart at the Warnemunde yard and the rest of the ship constructed and assembled at the Wismar yard in Germany. The 28,007 gt, 37,904 dwt ship has a capacity of 2741 TEU. Initially named Cape Manual, it took  its present name in 2013. The ship sailed from China October 23, passed the Panama Canal  November 13, then stopped in Jacksonville November 19-20, Savannah November 20-21 and Baltimore November 22. It will be interesting to see how long Costco is willing to make non-paying return trips to China with its own empty boxes. 

 The coastal container / RoRo Nolhan Ava over nighted at anchor in Bedford Basin and sailed late this morning.

Taht left X-press Machu Picchu (left background in photo) awaiting its turn at PSA Halifax South End terminal where the 15,128 TEU CMA CGM Chile was monopolizing the berth (sorry no photo.) The Franbo Lohas is also at anchor in Bedford Basin (right background in photo) as is the Polar Circle.

That also left the Skogafoss at anchor in the lower harbour, also destined for the South End Atlantic Hub.

The main event however was the float off of Arctic Offshore Patrol Vessel Number 4 from Halifax Shipyard. Yesterday the ship was transported aboard the submersible barge Boabarge 37 and this morning ship and barge were moved to Bedford Basin. In a day long operation the barge was submersed and the ship floated off and was moved back to the Shipyard.

With the barge in position, operators began to flood the ballast tanks to submerge the barge.

With the barge submerged almost out of sight, the ship is finally floating on its own hull and free of the support cradles.

Tugs took charge of the ship and moved it clear of the barge, and it was soon underway for the  Shipyard.

It will be well into next year before the ship is completed and handed over to the RCN. When it is commissioned it will be named HMCS William Hall (1827-1904) for the African Nova Scotian recipient of the Victoria Cross. (See https://en.wikipedia.org/wiki/William_Hall_(VC)

Another sailing today was USCGC Morro Bay (see November 25) which left the Tall Ships Quay around noon. The vessel is headed for its home port of Cleveland, OH,  but will be calling at Quebec City en route.

 

I mentioned the extraordinary condition of its hull paint in my previous posts - here is an example:

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