Rand Logistics Makes Significant Investment to Enhance Operating Efficiency
14 Febbraio 2008 - 3:38AM
Business Wire
Rand Logistics Inc. (Nasdaq: RLOG; RLOGW; RLOGU) (�Rand�) today
announced the planned repowering of one of its Canadian-flagged
vessels with a new highly automated emissions compliant power
plant. The project, estimated to cost approximately $13 million, is
expected to generate an annual mid-teens return and will be
completed in April 2008, at which time the vessel will be fully
operational. The repowering is expected to improve operating
margins due to an increase in speed and a reduction in fuel
consumption, labor, maintenance and other operating costs.
Additionally, Rand has decided to permanently retire the Calumet,
the oldest and smallest vessel in its fleet. The capital investment
required to enable the vessel to generate a satisfactory rate of
return over the next five years was not justifiable. The removal of
the Calumet from the U.S. market, combined with the previously
announced sale of one of the three acquired WMS vessels to Canadian
registry, will reduce U.S. Great Lakes shipping capacity by 3
million tons. The retirement of the Calumet will not have a
material impact on Rand�s cash flow. Laurence S. Levy, Chairman and
CEO of Rand, said, �The Canadian vessel upgrade will significantly
improve the vessel�s performance and boost its margin contribution
to our overall results. This vessel will be better equipped to
service our strong customer base in a more efficient and timely
manner. We could not justify the costs necessary to extend the life
of the Calumet, which is the oldest vessel in our fleet with the
least amount of carrying capacity. We believe despite removing
capacity from the market, we will be able to continue servicing our
network of blue-chip customers without a significant impact to our
results or operations. We continue to operate in an environment
where freight demand significantly exceeds capacity, and we are
well positioned to capitalize on this opportunity to further grow
our business.� About Rand Logistics Rand Logistics, Inc. is a
leading provider of bulk freight shipping services throughout the
Great Lakes region. Through its subsidiaries, the Company operates
a fleet of ten self unloading bulk carriers, comprised of nine
River Class vessels and one River Class integrated tug/barge unit,
and three conventional bulk carriers, of which one is operated
under a contract of affreightment. The Company is the only carrier
able to offer significant domestic port-to-port services in both
Canada and the U.S. on the Great Lakes. The Company�s vessels
operate under the U.S. Jones Act � which dictates that only ships
that are built, crewed and owned by U.S. citizens can operate
between U.S. ports � and the Canada Marine Act � which requires
Canadian commissioned ships to operate between Canadian ports.
Forward-Looking Statements This press release may contain
forward-looking statements (within the meaning of the Private
Securities Litigation Reform Act of 1995) concerning the Company
and its operating subsidiaries. Forward-looking statements are
statements that are not historical facts, but instead statements
based upon the current beliefs and expectations of management of
the Company. Such forward-looking statements are subject to risks
and uncertainties, which could cause actual results to differ from
the results included in such forward-looking statements.
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