NEWS:U.S.-Flag Carriage Down Again In 2002

Maritime Activity Reports, Inc.

January 29, 2003

Iron Ore Off 24 Percent From Pre-Dumping Days

U.S.-flag Great Lakes vessels hauled 101.3 million tons of cargo in 2002, a slight decrease compared to 2001. Even the one gain - 1.2 million tons of iron ore - is misleading. During 2001, LTV Steel, the nation's third largest producer, was continually reducing its iron ore requirements as it limped toward bankruptcy and then closure. ISG relit those blast furnaces in mid 2002, so the upturn reflects a resumption of production at those facilities in Ohio and Indiana. In reality, the 48.2 million tons of iron ore moved in U.S. bottoms in 2002 represent a decrease of 24 percent compared to 1997. It was in that year that foreign steelmakers, facing contracting markets in Asia, began dumping their excess production in the United States. Since then, more than 30 American steelmakers and steel processors have filed for bankruptcy. Roughly half of those companies will never melt iron or mold steel again. The U.S.-flag coal trade was essentially unchanged in 2002. Reduced demand for eastern coal offset an increase in loadings of western, low-sulfur coal. Shipments of limestone decreased slightly and reflect both reduced demand for fluxstone from steelmakers and slack orders for aggregate from the construction industry. The 8 percent fall-off in cement cargos likewise relates to the general sluggishness that characterized the Great Lakes basin construction industry in 2002. A quartet of U.S.-flag lakers never operated in 2002. The Edward L. Ryerson and Elton Hoyt 2nd owe their idle status to steel's woes. The small self-unloaders Richard Reiss and Joseph H. Frantz were victims of the slowdown in aggregates shipments. Several other U.S.-flag lakers were delayed in their return to service. The mid-sized self-unloaders Buckeye and Courtney Burton did not sail until June. The American Republic did not resume operations until early July. Even the 1,000-footer James R. Barker remained inactive until late June.

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