Soy Transportation Coalition renews agreement with Canada’s St. Lawrence Seaway Management Corporation
The number one exported agricultural crop in the United States most years is soybeans, with much of that production transported from farms to shipping ports in places like New Orleans and then exported overseas.
The importance of keeping those shipments running smoothly has led to the U.s.-based Soy Transportation Coalition signing a memorandum of agreement with Canada’s St. Lawrence Seaway Management Corporation, which promotes the 3,700-kilometre Great Lakes/st. Lawrence Seaway system — known as Highway H2O — as a marine shipping route.
Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), says a lesson learned by many industries in recent years is this: supply chains really matter. “One of the cardinal rules of supply chain management is, don’t put all your eggs in one basket,” he says.
According to Steenhoek, more than 80 per cent of soybeans headed for export end up on the lower Mississippi River system or the Pacific Northwest via the Columbia River or Puget Sound. But any transportation system can be subject to disruptions, such as low water levels or flooding on marine routes, weather events like a hurricane or issues with railway transportation.
Steenhoek says with more than half of the soybeans produced in the U.S. being exported, “farmers realize that you can’t just get supply right, you can’t just get demand right. You have to have that connectivity between supply and demand, you have to get that right too. And that’s what our transportation system does.”
It’s always been a guiding principle of the STC to try to diversify supply chain options for the farmers it represents through 13 state soybean boards and two national boards: the American Soybean Association and the United Soybean Board.
“When you do that, farmers and agriculture will stand to benefit,” says Steenhoek. “And one of the supply chain options that we think could be more thoroughly utilized is the Great Lakes and St. Lawrence Seaway system.”
Many key soybean-producing states like Illinois, Minnesota, Ohio, Indiana, New York and Wisconsin are located adjacent to the more-northern waterway system, making it a nearby option.
Bruce Hodgson, director of market development with the St. Lawrence Seaway Management Corporation (SLSMC), says the agreement with the STC is in keeping with the corporation’s role to act as a catalyst in expanding opportunities for its port partners, carriers, terminal operators and cargo owners.
“We bring everybody together to maximize the synergies in order to generate new business through the system,” says Hodgson.
He says a few years ago SLSMC identified the U.S. agricultural and grain market as having potential for greater use of the Great Lakes/st. Lawrence Seaway’s Highway H2O to reach markets in Europe, Northern Africa and the Mediterranean.
SLSMC reached out to the Soy Transportation Coalition, which eventually led to the agreement.
Hodgson says Highway H2O has an excellent reputation for reliability, consistency and cost competitiveness with other Northern American transportation gateways.
“Another area that is critical when we talk about reliability is available vessel capacity,” says Hodgson. “And we are fortunate that we have a variety of carriers that call our system, and that provides us with a real opportunity in terms of ongoing available capacity.”
He adds also in Highway H2O’S favour is additional elevator capacity that is coming on-stream and in some cases is already operational in U.S. Great Lake cities like Duluth and Milwaukee.
“From a throughput/supply chain standpoint, we are well aligned, from terminal capacity to carrier capacity, and coupled with reliability — we have opportunity to accept more cargo.”
The agreement between the STC and SLSMC includes a Gateway Incentive Program that offers a reduction in shipping tolls for new soybean shipments on Highway H2O.
Steenhoek says they are very pleased with the relationship that has developed with SLSMC and the resulting agreement. “It’s really a collaborative partnership that we have (with them),” he says. “And developing the Gateway Incentive agreement has been a very efficient and streamlined process.
“As we know, it’s one thing to have a good idea but if the process is so bureaucratic and cumbersome that it makes it difficult to institute and make available — then you might as well not even have the good idea in the first place.
“So, the fact we have this very productive and efficient relationship with the St. Lawrence Seaway Management Corporation is something we sincerely appreciate, and we look forward to continuing to work with them in the future.”
To learn more, visit hwyh2o.com/home.