McKeil Marine at 60

Canadian ‘Underdog’ morphs into big league niche player A unique Canadian success story in breakbulk and project transportation services had the most modest of beginnings. Originally from Pugwash, Nova Scotia, Evans McKeil and his father William built in 1956 a 35-ft long wooden boat powered by an automobile engine in Hamilton Harbour on Lake Ontario that was used to transport workers building the St. Lawrence Seaway. Sixty years later, the fledging enterprise today known as McKeil Marine has morphed into an important niche player in North American shipping - boasting a fleet of 24 tugboats, 31 barges, numerous workboats, plus two recently-acquired bulk carriers. The tug and barge units can access shallow water ports and dock locations that larger vessels cannot. Transportation services are provided for bulk and project shipments throughout the Great Lakes, St. Lawrence River, East Coast and the Arctic region, sometimes in collaboration with such global heavy lift operators as Mammoet. Headquartered in the Port of Hamilton, McKeil Marine has satellite offices in Montreal, Rothesay NB and St. John’s, NL. It is also currently developing an “Atlantic Base” in Sydney Harbour, Nova Scotia.

Family Owned The family-owned company employs about 300 shore-based, sailing and seasonable workers. Each staffer is called crew as part of a deeply-ingrained, family-friendly culture. “We are proud of what we do,” said Blair McKeil, chairman and CEO, who succeeded his father at the helm in 1992. “Robots don’t build companies – people do.” In an interview, McKeil said “without great people, you can’t have a great company – and we have quite a few.” Indeed, the people dimension has long been instilled in the company’s culture. In the early days, for instance, Blair McKeil would spend the Christmas Holidays with his father breaking up the ice on the Welland Canal so that tugboat and barge crew could have time with their families. Interestingly enough, senior executives and employees still like to describe their company as an “underdog” compared with the large Canadian bulk shipping firms with much longer histories and substantial fleets trading domestically and internationally. This reflects a certain humility but also a feistiness inherent in the personality of Blair McKeil. The entrepreneurial vision of the second-generation owner is fuelled by seemingly boundless energy and unbridled exuberance. And the facts suggest that, under his stewardship, the company based at Canada’s leading Great Lakes port has emerged as much more than an “underdog.” To begin with, how many maritime carriers in this millenium’s turbulent times for global shipping can report robust revenue growth? “The company has achieved double-digit annual growth over the past five years,” McKeil revealed, without going into further details. Like other Canadian shipping firms trading on the Great Lakes/St. Lawrence waterway, McKeil Marine has invested in new assets. The more than $120 million allocated in five years demonstrate that McKeil has significantly broadened its reach. Fleet Additions A 15,000 dwt bulk carrier, the Evans Spirit (named after founder Evans McKeil), joined the fleet last autumn. It has been complemented since June by a similar vessel (the Arkow Willow) that will soon bear the name of Evans’ wife Florence and be called the Florence Spirit. All told, the two Canadian-flag vessels have created 50 full-time sailing crew positions. A ‘Scrappy Upstart’ with Bold Instincts “Once a scrappy upstart operating on Hamilton’s docklands, the company has grown in size and in scope to one of the most recognizable names in Hamilton business and the Canadian maritime industry,” comments Ian Hamilton, Vice-President, Business Development and Real Estate, Hamilton Port Authority. Hamilton considers that “the company hasn’t lost the bold instincts of its early days, thriving on innovation. Mckeil is developing new ways of delivering service in some of North America’s most challenging environments.” Longstanding relationships with companies like Aluminerie Alouette in Sept-Iles have served McKeil well. McKeil introduced the Evans Spirit to its fleet after signing another long-term contract (to 2021) last October with Aluminerie Alouette. The two parties have been partners for over 10 years, with Alouette depending on McKeil’s Alouette Spirit barge to ship aluminum towards the Great Lakes and the ports of Oswego, NY, Toledo, Ohio and Detroit, Michigan. Since 2005, Alouette has shipped more than 2 million tonnes of aluminum via the “Blue Highway.” “On the overall transportation side, our focus is on moving cargoes ranging from 9,000 to 15,000 metric tons,” indicated McKeil president Steve Fletcher. The Evans Spirit, he went on, “is not dedicated just to Alouette. The important thing was to find a vessel that could be very versatile to move aluminum but also flexible enough to carry agriculture, cement and other dry bulk products as part of its trading pattern with the East Coast and Great Lakes region.”

Daunting Long Harbour Processing Plant Project Especially daunting was the Long Harbour Processing Plant project in NL and Labrador. Mckeil Marine was contracted by Mammoet to provide the marine transportation of modules for Vale Limited’s construction of a new nickel processing plant. Most of the cargo pieces were sourced from the Gulf of Mexico, the eastern seaboard and Great Lakes. Complex logistics schedules prevailed throughout the operations. At the peak, McKeil had nine tug and barge units transporting modules and equipment. The fleet included five 400’x100’ barges chartered from U.S. operators which typically sailed between the Gulf of Mexico and Newfoundland. A total of 56 cargo loads at 14 different ports occurred between March 2011 and December 2013. Recalling the many challenges in transporting production modules that could be up to five stories (60 feet) high, Boag stressed the importance of good weather cooperating in order to meet tight sailing schedules for delivery to the Long Harbour site. “This was not always the case. A normal trip would take 10 days. But some shipments took up to 40 days due to bad weather conditions forcing our units to seek a port of refuge or protected bay along the east coast. There were occasions when we even had to send in another tug to supply fuel to a unit that had spent so much time on stand-by in midst of strong winds and high waves.” Present Market Outlook How are present markets shaping up for McKeil Marine? Here, Steve Fletcher sees continuing opportunities in its existing regional markets “where we have more room to grow. I don’t think that expanding into international markets (beyond North America) is that close to our future.” For his part, Blair McKeil notes, first of all, that there is more and more competition from foreign flag vessels, for example, in areas like wind energy components. And, taking the Great Lakes as a whole, McKeil suggests that there are some clear challenges: “The Great Lakes do not have a revenue base that is growing for marine carriers. More and more, the manufacturers are moving south, whether it’s Louisiana, Alabama, Mississippi or Mexico. As a result, the Clevelands, Eries, Chicagos and Toledos of this world are busily re-inventing themselves. Much the same is also happening at cities like Hamilton. Toronto, Oshawa and Windsor. Monumental change is a constant. You have to be open to change, or it will pass you by.”