By Alex Binkley
It has been a slow summer for shipping on the Great Lakes, but there are indications a pickup in business is coming this fall, says Wayne Smith, Senior Vice-President Commercial of Algoma Central.
Perhaps the most encouraging sign is ships coming out of layup. Smith says Algoma planned to have all its ships return to service during August. CSL’s Spruceglen departed Toronto in early August after being parked there since last December.
The best prospect so far is the large grain crop expected in Western Canada, and the closure of the port of Churchill should translate into extra shipments from Thunder Bay.
Compared to the same period of last year, the Seaway reported an 11 per cent drop in traffic from 14.9 to 13.2 million tonnes for the 2016 shipping season to the end of July. Grain shipments were down by 9 per cent, iron ore shipments dropped by 28 per cent, dry bulk and coal were each down by 13 per cent, and general cargo recorded a 12 per cent drop. Partially offsetting the declines was a strong gain in liquid bulk shipments (28 per cent)
Betty Sutton, Administrator of the U.S. Seaway Development Corp. said, “The lack of iron ore and coal has definitely been a contributing factor for this decrease; however international traffic continues to be well above the five-year average, keeping our ports and their workforces busy.”
The U.S. Great Lakes Carriers Association noted the iron ore trade on the Lakes was down 15 per cent in July compared to a year earlier while limestone was off 18 per cent. The 5.6 million tonnes of iron ore moved in July trailed the 5-year average by more than 18 per cent. Year-over-year, loadings at U.S. ports are down by 113,000 tonnes, but shipments from Canadian ports have fallen by 21 per cent or 743,000 tonnes.
Limestone shipments of 3.3 million tonnes in July were 14 per cent below the month’s 5-year average. Loadings out of U.S. quarries totaled 2.6 million tonnes, a decrease of 26 per cent compared to a year ago. Shipments from Canadian quarries totaled 760,000 tonnes, an increase of 35 per cent compared to a year ago. Year-to-date American loadings are 11 per cent below the 5-year-average while shipments from Ontario quarries total 2.7 million tonnes, an increase of 19 per cent.
Smith said the mild 2014-15 winter “reduced demands for salt shipments and product tanker activity. The North American steel industry has been buoyed by higher prices but a number of challenges remain including financial restructurings of U.S. Steel Canada and Essar Algoma, which are ongoing. Continued very low commodity prices have reduced exports of commodities such as coal and iron ore from the Great Lakes.”
The drop in Great Lakes traffic can be seen from Algoma’s Q2 results. The company reported 2016 second quarter revenues of $96 million compared to $125.4 million for the same period in 2015. The decrease in revenue occurred mainly in domestic dry-bulk and was due to reduced customer demand in all major commodities and the impact of fuel costs that are passed on directly to customers as part of the freight rate. By comparison, Canadian rail freight traffic to late July was down 7.7 per cent from the same time in 2015 with most of the decline resulting from declines in loadings of manufactured goods or commodities, rather than shipments of containerized consumer goods