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  • A wave of optimism with Seaway opening

    Posted on: March 12th, 2017

    By Alex Binkley

    When it comes to the prospects for a new navigation season on the St. Lawrence Seaway and Great Lakes, Terence Bowles and Craig Middlebrook have to sound optimistic. This year might justify upbeat comments the President and CEO of The St. Lawrence Seaway Management Corporation and the Deputy Administrator of Saint Lawrence Seaway Development Corporation offer in separate interviews.

    The Seaway will open March 20, followed five days later by the opening of the American Soo locks between Lakes Superior and Huron, and the 2017 navigation season on the Great Lakes will be fully under way.

    While the Seaway finished down by 3.1 per cent in tonnage in 2016 compared to 2015, the gap between the two years narrowed during the final months as traffic picked up. The revival in the North American economy has continued, albeit cautiously into 2017.

    “All the signs are very encouraging,” Bowles said in mid-February. “Canada and the United States are heading for growth rates of 2 per cent to 3 per cent and Europe should manage 1 per cent or better.”

    “We expect positive growth over the year,” Middlebrook said. “We have more reasons to be optimistic this year than we’ve had recently.”

    Both men point to hefty stocks of grain waiting to be exported, and little ice on the Great Lakes this year to delay the ships. On top of that, international iron ore prices have risen to levels that justify exporting from U.S. mines in Michigan and Minnesota. Ratification of the Canada-Europe trade deal in Ottawa and Brussels could boost the flow of Trans-Atlantic traffic later this year.

    If the shipping industry needs additional encouraging economic signs, it could take heart from the latest statistics from the American Association of Railroads. For the week ending Feb. 18, the 13 U.S., Canadian and Mexican railways reported total weekly traffic was up 7.6 per cent from the same point in 2016. For the first seven weeks of 2017 traffic was 3.2 per cent above last year. Canadian railroads reported cumulative rail traffic volume was up 7.4 per cent for the period compared to 2016.

    The port of Thunder Bay recorded its busiest December ever loading Canadian grain in domestic and ocean-going vessels. It was a similar situation in the American grain ports as shipments increased by 21 per cent during 2016.

    Last year, the Seaway opened on March 21 and closed on Dec. 31, a navigation season of 286 days that tied the record first established in 2008 and matched in

    2013 for the longest navigation season. Bowles said the opening date is always constrained by the need to perform maintenance and upgrades on Seaway facilities during the winter.

    While ice coverage on the Lakes in late February had dropped below 10 per cent, there was enough snow during the winter in the Great Lakes region to ensure chart datum if not higher water levels during the season.

    Bowles said in addition to grain and ore, other bulk commodities including salt as well as liquid bulk shipments should increase this year. Then there’s the possibility that infrastructure spending in Canada and the United States might generate the need for construction materials, aggregates, cement and steel.

    Middlebrook said the shipping lines that are introducing new ships to the Great Lakes trade are giving the waterway the kind of vote of confidence it needs.

    As Canadian Sailings was going to press, a new Chief Administrator had not been named yet. Until one is, SDC will continue on its current path, Middlebrook said. He stressed the system’s sterling safety record, which has seen accidents trend steadily downward. He also said a joint Canada-U.S. inspection of ballast tanks of ships in Montreal before they enter the Seaway has recorded a compliance rate over 99 per cent, and has stopped the introduction of new aquatic pests into the Great Lakes. The Eisenhower Lock will have full hands off mooring this year, he said.

    Bruce Burrows, President of the Chamber of Marine Commerce, said, “Obviously, it’s too early to tell how things will fare in 2017 but we’re particularly encouraged by the fact that there is a large carry-over of Prairie grain for potential export.” The strong improvement during the last quarter of 2016 was due to Canadian ships “back in full service delivering iron ore pellets from U.S. Great Lakes ports to the Port of Quebec for transshipment overseas. The grain program was very strong in November and December with the Port of Thunder Bay reporting its best December since 1995.

    “We’re also seeing new business coming to fruition in 2017 that illustrates both the economic and environmental value of shortsea shipping. For example, NACC Quebec, which is managed by Algoma Central’s new joint venture NovaAlgoma Cement Carriers, arrives for duty this spring to start service for the new McInnis Cement facility located in Port Daniel, Quebec. Ninety-five per cent of McInnis Cement’s products will be delivered by ship and its target markets include the Great Lakes-St. Lawrence, and New England along with international destinations. McInnis Cement has specifically highlighted environmental advantages as its reason for committing to the marine mode and it’s investing a lot of money in building a terminal network including one in Sainte-Catherine, outside Montreal, that will welcome about 25 vessels per year.”

    Mike Broad, President of the Shipping Federation of Canada, said traffic on the Seaway-Great Lakes “should be up a bit.” Growing economic activity in the United States should increase the demand for imported steel and there’s plenty of grain to transport to overseas customers.

    James Weakley, President of the Lake Carriers Association, said 2016 was a disappointment for American shipowners as traffic fell 4.5 per cent. “Low natural gas prices and the retirement of older, coal-fired power plants slashed coal loadings by a quarter. A sluggish construction market and lower capacity utilization rates at steel mills held down aggregate and fluxstone cargos. “In a world economy characterized by volatility and unpredictable swings in trade patterns, the Seaway System provides a resilient transportation network that keeps all types of goods moving”, he commented.

    The Association doesn’t offer predictions about future traffic. Weakley said “Great Lakes shipping faces its fair share of challenges in 2017, but on balance, the winds are favorable and the seas are following. There should be more funding for badly needed dredging of American ports.” The construction of a second full sized lock at the Soo would generate a $1.7 billion benefit for the American economy, says a study released in January 2017 by the U.S. Treasury Department, he said. It’s also crucial to get a second heavy icebreaker built “especially given that Canada’s icebreaking forces are woefully inadequate and will be for the foreseeable future.”