By Brian Dunn
Considering how closely they are linked, it seems fitting that at the same time the St. Lawrence Seaway is celebrating its 60th anniversary, Fednav is celebrating 75 years in business. The company was founded in Toronto by Ernest Pathy on Sept. 7, 1944, as Federal Commerce & Navigation Co. Ltd., Ship Owners, Operators & Agents. Two years later, it bought its first vessel, Federal Pioneer, and began trading. On Jan. 1, 1984, Federal Commerce and Navigation merged with Fednav to become Fednav Ltd.
From that humble beginning, the company has become Canada’s largest bulk shipping company, annually transporting over 30 million tonnes of mainly dry bulk, including agricultural products, sugar, fertilizers, and industrial minerals, as well as steel and other general cargo on a fleet of 65 owned vessels with nine more on order. The company operates a total of about 125 vessels from Handysize to Ultramax bulk carriers.
In addition to delivering cargo to ports along the St. Lawrence and Great Lakes, Fednav has been active in the Canadian Arctic since the mid-1950s. It owns and operates both 31,500-tonne MV Umiak I and MV Nunavik, the most powerful icebreaking bulk carriers of their kind as well as MV Arctic, an oil-bulk-ore icebreaking vessel powerful enough to navigate unescorted through ice-covered waters.
Although it operates massive impersonal steel vessels, this year, Fednav was recognized by the Montreal Gazette as one of the city’s top employers for the eighth consecutive year and by The Globe and Mail as one of Canada’s Top Employers for Young People for the sixth year running, in recognition of the company’s “commitment to the well-being and development of its employees.” It was also named the Bulk Ship Operator of the year for the first time at the inaugural International Bulk Journal awards in 2009. Fednav has won six more IBJ awards since then.
The company moved its head office to Montreal in 1953 for “strategic reasons,” namely to join Canada’s centre for international shipping at the time, and now has offices in Antwerp, Hamburg, Rio de Janeiro, Singapore, and Tokyo, as well as a number of local offices in the United States and Canada.
Both the shipping industry and the company have seen major changes over the last 75 years. The changes for the industry include propulsion, ship design and the size of ships, speed of communication and data exchange and most recently, environmental concerns. For Fednav, the company has morphed into a ship owner from a ship operator. Services to and from the Great Lakes began in 1959 with the opening of the St. Lawrence Seaway. That same year, FALLine (Federal Atlantic Lakes Lines) became the established steel carrier from Europe to the Great Lakes. FMT, the company’s terminal services division, was incorporated in Chicago in 1965 and operates 11 facilities in the Great Lakes, U.S. East Coast and in the Gulf of Mexico..
In addition to bulk shipping, Arctic operations, FALLine and FMT, Fednav has a Shipowning and Technical Services department that oversees the technical management of the company’s owned fleet. It also operates ENFOTEC, an ice monitoring and analysis service, and Fednav Direct, offering value-added on-carriage services, inventory management and 24/7 inland transportation of cargo throughout North America.
According to Fednav, the three most important milestones in its history are the beginning of Arctic operations, the opening of the Seaway and operating a record 137 ships in 2019. But there are other major events worth noting that have taken place since it first opened its Toronto office at 37 Front Street. Fednav was instrumental in performing Arctic community resupply and servicing DEW Line sites beginning in 1955. A year later, it opened its first international office in Tokyo, followed by Hamburg (1965), Antwerp (1966), Rio de Janeiro (1990) and Singapore (2011).
In 1962, the company took delivery of Patignies, its first owned newbuild bulk carrier. In 1978, MV Arctic was commissioned and built at the Port Weller Dry Docks, powerful enough to navigate through ice-covered waters unescorted. That same year, Fednav’s Avon Forest rescued a boat of Vietnamese refugees. Two years later, the company took delivery of Amazon, its first Capesize bulk carrier. In 1985, Fednav signed a long-term contract with Cominco for the transportation of concentrates from its new Red Dog mine in the Bering Sea.
Another noteworthy event occurred in 2006 when Umiak I was delivered, which, at the time, was the highest ice-class cargo vessel in the world. Five years later, Federal Tiber was the first freighter to carry ore from Baffinland’s Mary River mine. Fednav is also involved with other northern mining operations including Vale’s nickel mine in Voisey’s Bay, Labrador, Glencore’s Raglan nickel mine in Nunavik and the Canadian Royalties copper and nickel mine in Val d’Or, QC. A final event worth noting happened in 2014, when MV Nunavik made history by transiting the Northwest Passage unescorted with a full load of nickel concentrate from Deception Bay to China.
In 1960, Laurence (Ladi) Pathy joined the privately-owned and family-controlled Fednav. He was appointed President and CEO in 1972, a position he retained until 2010. He currently remains as Chairman of the company.
Paul Pathy (Laurence Pathy’s son) joined Fednav in 2003 as Vice-President and General Manager of Federal Marine Terminal. He became sole Chief Executive in 2016, a role he had shared since 2010 with brother Mark who stepped down and is no longer with the company, but remains a director and shareholder.
During an interview earlier this year, Paul Pathy expounded on a number of issues affecting the company. He said the market should be “slightly better in the last few months of 2019 and first half of 2020” than it was in 2018. Asked whether the U.S.-China trade war was impacting business, Mr. Pathy said trade wars create uncertainty and are never good for business.
“That being said, the trade war…saw us transporting a surge of beans and canola shipments from Canada to China in 2018. In 2019, this tonnage disappeared.” In terms of the Comprehensive Economic Trade Agreement with Europe, the CEO said increased trade appears to be having a bigger impact on container traffic than general cargo.
As for what he believes will be the biggest game changer for the industry, Mr. Pathy believes it will be decarbonization by the end of the century. In terms of the company’s growth prospects, he remarked, “being financially solid, Fednav will continue to grow organically and will remain open to new (acquisition) opportunities. There are industries and geographical areas that we can further explore.”