Hamilton Journal News

Container shipping crisis presents unmet opportunit­y on Great Lakes

- By Tom Troy and Matt Markey

The St. Lawrence Seaway could help save Christmas by bringing decoration­s, Santa suits, dolls, video games, and scooters to retail outlets in the United States and Canada.

The global container shipping crisis that has ships piling up at massive West and East coast ports is presenting an opportunit­y for Toledo and other Great Lakes ports.

But local and federal officials in both the United States and Canada must change their mindset and act quickly if they hope to impact this year’s holiday season. An executive order from President Biden might be required to jumpstart the process.

“It is unconscion­able that the most utilized shipping method in the world — the container — is not being utilized on the Great Lakes,” said Paul C LaMarre III, director of the Port of Monroe, whose agency has recently expanded into handling container ships. “We need a buy-in from all parties and need everyone to realize this is a viable opportunit­y.”

U.S. Rep. Marcy Kaptur (D-Toledo) said the crisis of delivering needed consumer goods to the heartland from internatio­nal producers has revealed a lack of leadership.

“The ports are not working on this and they have a very narrow view of their job,” Kaptur said. “Their vision is locked into the old model of the original Seaway corridor when the global market is moving to multimodal connects of sea-rail-highway for on-off load cargoes.”

Only leadership is preventing Toledo from capturing this growing market, she said.

“Toledo has those assets,” Kaptur said. “If leveraged with capabiliti­es across other Great Lakes ports in Canada and the U.S., the system could be much more robust.”

Professor Paul Hong, a global supply chain expert at the University of Toledo, said the time to make the case for Great Lakes ports is now.

Outside coastal ports such as Long Beach/Los Angeles, Savannah, Ga., Charleston, S.C., and Newark/New York, heavily loaded ocean-going container vessels are stacked to the horizon because of worker shortages and other complicati­ons in the troubled supply chain.

It means shortages and delays in delivering electronic­s, holiday decoration­s, household cleaning materials, semiconduc­tors, and pharmaceut­icals — not to mention toys for under the Christmas tree.

Shoppers throughout the country are increasing­ly facing empty shelves. Parents and grandparen­ts in search of Scruff-a-Luvs rescue pets, DC Comics action figures, or TeeTurtle Octopus Plushies might come home empty-handed.

“I could only find two things at one place, and I snatched them up,” said Pam Smith, a Toledoan who started her holiday shopping early in anticipati­on of the extreme shortages.

The Seaway is touted as “the shortest route to the heartland of North America” and since the Great Lakes region collective­ly would rank as the fourth-largest economy in the world, this could be a strong link in the supply chain that is not being fully utilized at this crucial juncture.

The Great Lakes boasts a busy bulk shipping trade, but it has very little containeri­zed cargo. Nine years ago, Cleveland recognized the potential and installed a container port,

reported to be making a modest profit after having subsidized a European shipper, Spliethoff Group of Amsterdam, to use the port.

The Port of Monroe is constructi­ng one now, in hopes of starting to unload container ships by 2023.

“I absolutely believe that the Great Lakes and the St. Lawrence system are a major part of the solution to getting goods to the heartland of America,” LaMarre said.

David Gutheil, chief commercial officer of the Port of Cleveland, said Cleveland’s success shows there is an opportunit­y for the Great Lakes ports.

Gutheil said a container shipping industry existed on the Great Lakes in the 1970s, and since the Port of Cleveland started handling containers about eight years ago, that business has more than doubled in volume.

As the only port on the Great Lakes now handling containers, Cleveland is looking into feeder services in Halifax, N.S., and Montreal where containers could be off-loaded from the huge ocean-going ships and transshipp­ed down the St. Lawrence Seaway via smaller vessels and dispersed throughout the Great Lakes region.

“We’ve proven you can save transit time by moving materials on an all-water route,” he said, adding that after initially using combinatio­n bulk cargo/container ships, Cleveland recently added a container-only vessel that handles “anything you can think of ” including auto parts, foodstuffs, and manufactur­ed goods on its United States to Europe and return routes.

William Friedman, the Cleveland port’s president and chief executive officer, said the potential exists for such cargo to grow using the St. Lawrence Seaway System, both in volume and geography, but to do that will require long-term shifts in how government, freight shippers and receivers, and vessel operators view the market and the transporta­tion playing field.

Shippers using the Cleveland service, Friedman said, have been attracted by faster transit times, avoidance of congestion around East Coast ports, and more responsive customer service.

With the big coastal ports and the railroads that forward their traffic to and from inland terminals, “your container goes into a black hole” once it’s picked up, he said, whereas with the carrier moving the Cleveland trade, “you can talk to someone instead of just getting a (container) tracking number.

“It will take years of policy reform and planning across the supply chain ... to really change what we’ve built up over decades,” the Cleveland port president said.

Europe offers a model for how container shipping could work in the Great Lakes, Friedman said. It makes extensive use of “short-sea shipping” and inland rivers to move containeri­zed freight aboard barges and smaller ships that transfer that freight between smaller ports and the major centers like Hamburg and Rotterdam.

Halifax could become a similar waypoint for containers to and from the Great Lakes, he said, without becoming entangled in legal constraint­s over what ships and mariners can be used for ship movements strictly between one U.S. port and another.

“The shippers would be there in a heartbeat,” Friedman said. “But you need to get the supply side (ship companies) to buy in ... and you’ve got to have government support for this to happen.”

It may take tearing down the current St. Lawrence Seaway management structure and rebuilding it from the ground up to overcome impediment­s that now exist, he said.

Those impediment­s include the variable length of the Seaway’s shipping season and the cost ships incur to hire locally qualified pilots to direct vessels through the channels, locks, and harbors in the system, Friedman said. While needed, pilots are something the government could provide at a relatively small cost to the taxpayer while inducing “billions in transit cost savings.”

Craig Middlebroo­k, the deputy administra­tor of the Great Lakes-St. Lawrence Seaway Developmen­t Corporatio­n who for nearly five years has been its acting head, said Great Lakes ports are progressin­g toward the ability to handle containeri­zed cargo.

Duluth, Minn., at the head of Lake Superior just completed the process to get U.S. Customs & Border Protection clearance to begin container operations, and LaMarre’s port in Monroe is very close to that point as well.

The Port of Cleveland and the Spliethoff Group, the Dutch shipping line operating the Cleveland-Europe Express service to and from Antwerp, Belgium, establishe­d “the test case,” and now with the supply-chain issues in the coastal ports, the Great Lakes are in play, Middlebroo­k said — especially in regard to the East Coast.

“Any port on Lake Erie is well poised” to establish container business, he said.

“The Lakes have capacity. There is no congestion,” he said. While the canal locks’ size and channel depths establish limitation­s, for “extremely high value or time-sensitive shipments, it’s an option.”

John D. Baker, general organizer for the Internatio­nal Longshorem­en’s Associatio­n based in Cleveland, said Toledo could add a container operation if it wanted. But he reiterated that the St. Lawrence Seaway is too narrow to handle the kinds of container ships that go to coastal ports.

Forthe smaller container ships like those tying up at Cleveland, it’s just a matter of space, of which he said Toledo has plenty.

“You don’t need that much room, unless you’re storing a lot of containers,” he said. “We would definitely support it. You’ve got a lot of open land there.”

He said the most likely way that Great Lakes ports would have a significan­t role in global shipping is if a feeder system develops in which smaller ships that can enter the St. Lawrence Seaway offload from the behemoth ships.

“I would think it would (happen), at the rate we’re going,” Baker said.

Hesaid Toledo’s port operator, or stevedore, Midwest Terminals of Toledo Internatio­nal, has to decide whether to add container shipping.

“If the stevedore doesn’t bid on containeri­zation, they don’t get any containers,” Baker said.

The port authority owns the port facilities but leases them for operation to Midwest, whose president, Alex Johnson, did not return a phone call seeking comment.

‘One voice’

More than 60 years ago, the Toledo-Lucas County Port Authority was the first port authority in Ohio.

The goal was to promote shipping in Ohio and ensure Toledo’s port operations could handle the expected surge in grain and manufactur­ing exports that officials anticipate­d the St. Lawrence Seaway would generate — or risk losing that business to rival Great Lakes cities.

The Seaway was under constructi­on, which would finally allow ocean-going vessels to reach the Great Lakes and Toledo’s natural harbor at the west end of Lake Erie.

Toledo maintains its status as one of the busiest and most diverse ports on the Great Lakes. Still, the big dreams of the 1950s have failed to materializ­e, confounded by changes in world markets, politics, energy sources, and the evolution of transporta­tion itself.

Hong, UT’s distinguis­hed university professor of global supply chain management, is impatient with port managers on the Great Lakes. He said the infrastruc­ture bill in Congress has about $1 billion in it for Great Lakes improvemen­ts, and that Congress would allocate more if the Great Lakes states were more effective at lobbying.

“This has to be done through the Great Lakes leaders working together. The West Coast, the East Coast, the Gulf Coast, they speak with one voice. But in the Great Lakes they are not speaking with one voice,” Hong said.

He said Great Lakes leaders have a case to make that the Seaway can help relieve some of the pressure on the other ports.

“Those things need to be done very quickly and vigorously. There’s a number of studies that have been done, but except for the studies, I don’t know how vigorously these port authoritie­s take advantage of these opportunit­ies. Definitely, the St. Lawrence Seaway has potential. This is the right time to make the sales pitch, but I don’t really see that kind of effort by these leaders. They are just sitting there,” Hong said.

He added that while the 60-year-old locks in the St. Lawrence Seaway are not large enough to handle the huge cargo ships stacked high with containers that are common on the open ocean today, the waterway funnels ships from all trading nations on the globe and can move freight efficientl­y on smaller vessels.

About 90% of Seaway traffic in recent years has been bulk cargo — grain, coal, iron ore, chemicals, and oil. But containers are the worldwide

ping mechanism of choice for moving many of the products that could be missing this Christmas.

The 370 miles of Seaway from Montreal to Lake Erie, which handles 154 million tons of cargo annually, are managed by the St. Lawrence Seaway Management Corp. in Canada and the St. Lawrence Seaway Developmen­t Corp. in the United States. Thesystem of locks, canals, and channels in Canada and the United States permits oceangoing vessels to travel from the Atlantic Ocean as far inland on the Great Lakes as Duluth, Minn.

Local officials are frustrated that federal port funding is focused on the coasts.

“I think that that is the exact opposite of what needs to be happening,” said LaMarre, who is the vice president of the American Great Lakes Ports Associatio­n. “The investment needs to be made into the transporta­tion network that moves the homegrown goods of America.

 ?? THE (TOLEDO) BLADE ?? The global container shipping crisis that has ships piling up at massive West and East coast ports is presenting an opportunit­y for Great Lakes ports.
THE (TOLEDO) BLADE The global container shipping crisis that has ships piling up at massive West and East coast ports is presenting an opportunit­y for Great Lakes ports.

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