A group of Mount Gambier businessmen acquired the steamers Coorong and Penola in 1877 and operated a small company which serviced the south-east ports of South Australia. The ships used Prince's Wharf at Port Adelaide. This was on the south eastern side of the river, adjacent to the present Jervois Bridge.

The shipping scene in South Australia in the 1870s was dominated by the Adelaide Steamship Company and by the Victorian line McMeckan, Blackwood. These shipping lines monopolized the coastal and inter-colonial trade. A cut price war ensued as the companies fought for dominance. While passengers and freight were advantaged these prices could not be sustained. In addition many of the smaller ports suffered as they were ignored.

In the negotiations which finalised the rate war McMeckan Blackwood was forced to cease competing with Adelaide Steamship Company on the direct route between Adelaide and Melbourne. This meant that the south-eastern ports of South Australia were suddenly without shipping services. There were no railways in the area as alternative transport.

The attempt by the Mount Gambier businessmen was shortlived. By February 1881 they were forced to sell out, as they had steadily lost money on their enterprise. Penola and Coorong were bought by William Whinham, who was in turn bought out by Adelaide Steamship Company in 1883.