Ship emergency on Lake Superior is latest safety mishap for Great Lakes freighter operator

Lake Superior was calm, and the Michipicoten was plying deep waters June 8 when the ship's crew heard a loud bang.

The 698-foot freighter suddenly began taking on water near Isle Royale. The Michipicoten issued a mayday, and the U.S. Coast Guard rushed to the scene, evacuating half the ship's 22 crew members. The vessel limped to Thunder Bay, Ontario, where inspectors found the culprit: a 13-foot crack in its hull.

"It's really unusual to basically be out in the middle of the lake and start taking on water," said Thom Holden, a Great Lakes shipwreck and shipping historian in Superior, Wis.

Indeed, the Michipicoten incident is a rarity on the Great Lakes: a full-blown emergency on a commercial freighter. But it was the latest of several mishaps in recent years on ships that Rand Logistics, one of the largest Great Lakes carriers, operates.

One Rand ship caught fire in Lake Erie in May 2023 and then burned again while docked in Ashtabula, Ohio, in March.

Two weeks later, another Rand vessel hit a navigational aid near Sault Ste. Marie, Mich., shutting down traffic in a vital shipping artery for 40 hours. Yet another Rand ship grounded near Detroit in November.

The U.S. Coast Guard deemed two other groundings by Rand ships in the past two years as "serious marine incidents." And last summer, a Rand-owned ship leaked 1,500 gallons of diesel fuel into Lake Michigan after a hull breach in a fuel tank.

"That is a lot of incidents in a short time," said Roger LeLievre, president of the Marine Historical Society of Detroit and publisher of "Know Your Ships," an annual Great Lakes shipping guide.

"Rand Logistics has had an exceptionally bad first part of the year, and they have been having issues for a couple of years now," he said

Still, the Coast Guard hasn't found any "deeper safety concerns" with Rand's fleet.

"There is nothing conclusive that shows a broader safety or maintenance issue for Rand or its subsidiaries," said Lt. Phillip Gurtler, a spokesman for the Coast Guard's Great Lakes district in Cleveland.

Rand, based in suburban Buffalo, N.Y., defended its safety record in a statement: "The safety of our employees, proper maintenance of our vessels and commitment to the environment are our top priorities at Rand Logistics."

"We regularly conduct safety training programs for our employees and since 2020 have invested over $230 million in the maintenance and improvement of our vessels, which are highly regulated. … We adhere to all industry safety and operating standards."

The distress call

The outcome of the Michipicoten incident could have been much worse.

The 72-year-old vessel set out from Two Harbors with a load of iron ore, destined for Algoma Steel's big mill in Sault Ste. Marie, Ontario. The Canadian-flagged Michipicoten was 38 miles southwest of Isle Royale when around 6:15 a.m., it began taking on water — a lot of it.

The crew reported that 300 tons of water rushed in every 30 minutes, said Lt. Joe Snyder, a spokesman for the U.S. Coast Guard in Sault Ste. Marie, Mich.

The loud bang led the crew to initially speculate that the vessel had hit something, Snyder said, even though the Michipicoten was in water that was hundreds of feet deep.

The ship, listing to one side, issued a distress call. The Coast Guard responded with a helicopter and a boat. A National Park Service boat also came to the Michipicoten's aid, as did the Edwin H. Gott, a big commercial ship in the vicinity.

A seafarer aboard the Michipicoten, Kent Knechtel, described "a day of pure terror" with crew members not knowing if they "would see another day."

The crew hoped the ship's pumps — working furiously to redistribute water — would not fail, according to Knechtel, whose wife posted his story to a Facebook page, Ship Junkies — Lakes, Locks & Rivers.

"We were very lucky the weather was on our side for a change," Knechtel's message said. When the hull cracked, the wind was blowing at 23 mph, waves were 1 foot high, and visibility was good, according to the Coast Guard.

"The quick response of the officers and the crew, that is a part of this story," Holden said. "They did a remarkable job in saving themselves."

In Thunder Bay, divers discovered a 13-foot stress fracture, ¼ to 1 inch wide running lengthwise mostly on the ship's front bottom, Snyder said.

The Coast Guard is investigating the incident, as is Transport Canada, which regulates Canadian ships.

Other Rand ship accidents

Rand's ships ferry bulk cargo like iron ore, limestone and coal. Many are familiar to boat watchers in Duluth-Superior.

The company operates at least 20 vessels. The ships are parceled out under a Canadian-flag fleet subsidiary Lower Lakes Towing runs, and two subsidiaries that operate U.S.-flag ships, Grand River Navigation and American Steamship.

Incidents in recent years involve ships from Lower Lakes and Grand River.

The 81-year-old Cuyahoga caught fire on the Canadian side of Lake Erie in May 2023. The fire struck the engine room, and the ship lost propulsion. The Canadian Coast Guard, responding to a mayday call, evacuated eight of its 20 crew members. There were no injuries.

The Cuyahoga returned to service. It was fitting out for the 2024 shipping season at an Ashtabula dock — with both crew members and contractors aboard — when a huge fire erupted, said Ashtabula Fire Marshal Steve Chase.

The unintentional blaze caused about $30 million in damage, a fire department report said.

"We believe we dodged a much greater impact by sheer luck of timing," Chase said.

The fire started right after lunch break, just before contract workers were to return to the ship's ballast tanks.

"If it would have happened 10 to 20 minutes later, in all likelihood, there would have been fatalities," Chase said. "It would have been extremely difficult to get to them before being overcome by smoke."

The Tecumseh, another Canadian-flagged Rand ship, had an engine room fire in December 2019. The ship was motoring down the Detroit River near Windsor, Ontario, when a fuel hose assembly failed and sprayed oil on an engine, igniting the blaze, the Transportation Safety Board of Canada concluded.

Before the fire, the Tecumseh's engines had "leaks" and "failures" in their fuel hoses, the safety board found. The board concluded that the ship had "no guidance" for the testing, inspection or maintenance schedules of its fuel hose assemblies. The board also found several other shortcomings with the vessel and its fire safety systems.

There were no injuries, and the company scrapped the badly damaged Tecumseh a few years after the fire.

Rand's financial troubles

Established in 2004, Rand Logistics filed for Chapter 11 bankruptcy protection in 2018. A sinking Canadian currency had left Rand in a bind: Most of its debt was calculated in U.S. dollars, while 60% of its operating profits at the time were in Canadian dollars.

To complicate matters, the company sank $29 million into capital projects in 2019, primarily for substantial steel work on three ships. Deferring maintenance and repair on the vessels precipitated the costly project, according to a bankruptcy court filing.

A private equity group, American Industrial Partners (AIP), bought Rand out of bankruptcy and then sold a minority stake in the ship operator to another private equity outfit, Oaktree Capital Management. AIP exited its stake in Rand in February 2023.

This spring, Oaktree agreed to spin off most of its transportation infrastructure business — which includes Rand — to a new private equity firm led by two former Oaktree executives.

They will inherit a fleet that, according to Coast Guard records, has had several problems in recent years beyond fires and a hull failure.

In March, the American Mariner hit a concrete-and-steel navigational marker in the St. Mary's River system after the ship's steering failed. The St. Mary's, which connects Lake Superior to the lower Great Lakes, closed for 40 hours, delaying 29 ships.

In November, the American Courage ran aground for about 12 hours in the St. Clair River near Detroit, its second grounding in 18 months. In December 2022, the American Courage's bow thruster, which provides sideways movement, failed while the ship plied the Cuyahoga River through Cleveland. The vessel hit a boardwalk. The bow thruster had failed before the incident as well.

The John J. Boland ran aground in April 2023, causing $1 million in damages. Nine months earlier, the integrated tug-barge Olive M. Moore/Menominee grounded, causing $300,000 in damages. The Coast Guard appeared to deem both "serious marine incidents" because of the costs.

As for the Michipicoten, it patched up in Thunder Bay and then sailed to Superior, Wis. There, it is undergoing further repairs in drydock at Fraser Shipyards.

Meanwhile, the Lakes shipping community is speculating on what ultimately caused the most serious marine incident on Lake Superior in many years.

"There has to be something that started that crack on the Michipicoten," ship historian Holden said, "and once it started, it went like the dickens."