
During the annual manoeuvers, both Bigg City tug fleets service the navy. It is a dangerous job, handling ammunition and explosive barges. All is going smoothly until Bluenose, a bossy naval boat demands immediate priority with a barge-load of gasoline barrels. OJ, the oldest of the Star Tug fleet, warns that it's dangerous to stop the operation half-way through, but Bluenose insists and pushes in roughly. The movement knocks barrels of gasoline off the barge and they split open, spilling their dangerous contents. A spark from Bluenose's stack starts a series of fires and explosions which puts all the tugs in great danger.
It is the 1920's: Rival tug fleets compete for work in Bigg City Port. Captain Star briefs his Star Tugs - he's trying the regular contract to dock The Duchess ocean liner. It'll be a difficult job but to help out, the captain has recruited Sunshine, a small switcher. The rival Z-Stacks are encouraged by their devious Captain Zero to sabotage the operation. Their leader Zorran runs Big Mac aground, and nudges Sunshine into The Duchess's bow, swinging her dangerously. Captain Star orders Sunshine's dismissal, but he runs away, and is lost in the harbour in a thick fog.
Ten Cents delivers his last cargo barge to the Old Quay after a very busy day. As night falls, it is towed away by a mysterious boat. Captain Star is cross to hear that one of his customer's deliveries is missing and puts Ten Cents on dredger detail - not a pleasant task. But Grampus, a small submarine, sees another barge being stolen at night, so Captain Star and Captain Zero join forces to find the thief....