By Alex Binkley
A proposed increase in U.S. pilotage fees could undercut the success a direct maritime service between the ports of Cleveland and Antwerp has achieved. Container traffic on the Cleveland Europe Express so far this year has risen 500 per cent from the inaugural season in 2014, David Gutheil, Port of Cleveland’s Vice-President for Maritime and Logistics, said in an interview. Meanwhile the volume of other freight, including project cargo, has tripled from last year. At times during the season, the Spliethoff Group of Amsterdam brought in extra ships when the demand exceeded the capacity of the two calls a month originally planned for 2015, he added.
However, a proposal by the U.S. Coast Guard to increase pilotage rates by 58 per cent for American Great Lakes pilots next year has both the Port and Spliethoff worried.
“We have great expectations for 2016, provided this unilateral cost increase for trading into the Great Lakes will not happen,” says Bart Peters, Director of Spliethoff’s Atlantic Department. If the pilotage increase is implemented, Spliethoff has the option of sending “our vessels to U.S. East Coast and Gulf ports,” Peters said. “We do not have to send ships to the Seaway/Great Lakes; our ships can trade everywhere. As well, our customers do not have to ship via the Seaway/Great Lakes if it’s not competitive.” The Great Lakes ports need to boost their productivity and convince the St. Lawrence Seaway to operate year round, he added. “There is no defencible reason for closing for a few months during the winter. It should be open all year. The Great Lakes/Seaway is the most underutilized waterway in the world.”
Steve Fisher, Executive Director of the American Great Lakes Ports Association (AGLPA), says public comments on the proposed pilotage increase can be posted until November 9. “The Shipping Federation of Canada, AGLPA and the U.S. Great Lakes Shipping Association are all working together on a joint industry response to the proposed rate increase. That response is currently under development and will not be submitted until November 9.” Gutheil said his Port is worried about the impact of the proposed pilotage increase and is following the lead of the AGLPA on the issue. “We’re looking at it very carefully.” Meanwhile it’s working to build the volume of traffic for the service in 2016.
For the first year, Port of Cleveland chartered a ship from Spliethoff. Now they’re partners. The business has done so well, Spliethoff is prepared to provide enough ships for a weekly sailing from Cleveland in 2016 and offer an alternative transportation service option to cover the winter months when the St. Lawrence Seaway is closed.
“Due to continued growth and demand from the market, Spliethoff is introducing a monthly sailing between Antwerp/Zeebrugge and Baltimore during wintertime,” the company said an October 26 news release. “There will be a connecting rail service from Baltimore to Cleveland. As soon as the Great Lakes open in 2016, Spliethoff will resume direct port calls to Valleyfield, Que. and Cleveland.” The shipowner added, “Customers are getting frequency, reliability, continuity, speed and competitive solutions both for breakbulk, project cargo and containers, in both directions.” It noted that C-Port Maritime, the terminal operator in Cleveland, is investing in new shore cranes and a new warehouse that will provide complete crossdocking and storage options.”
C-Port Maritime is a subsidiary of Valport Maritime Services, which operates the port of Valleyfield near Montreal, where the CEE ships also call. Peters says Spliethoff wants the port of Cleveland to become a logistical hub for the U.S. Midwest. Gutheil would also like to see an extended Seaway navigation season to at least match the same period as the January 15 to March 15 closure of the Soo Locks. Even a few more weeks of shipping would make a great difference to the CEE service.
The growth of the CEE service and other initiatives by Port of Cleveland has earned it a Robert J. Lewis 2014 Pacesetter Award by the Seaway Development Corporation (SLSDC). The growth produced by the CEE service is “quite exceptional,” said SLSDC Administrator Betty Sutton. She said there had been a 35 per cent increase in international cargo through the port, with 30 additional international ships traveling through the Seaway to or from Cleveland in 2014. The creation of the CEE was seen as a “breakthrough in St. Lawrence shipping,” she added. The service was commented on by people she met in Europe during Seaway trade missions.
Port President and CEO Will Friedman said the award is “more proof that our strategic investment in the liner service and our docks are paying off, and helping Northeast Ohio businesses connect to and compete in the global economy.” An update delivered to the Port’s Board affirmed that the 2014 growth recognized by the Pacesetter Award has continued into 2015. Dave Gutheil stated that the CEE continues to increase volume significantly. The rise in shipping container traffic has been particularly dramatic. “The direct international connection the CEE provides is critical for our region to compete in the global economy.”
One reason the Port developed the CEE concept is that it is within eight hours travel of half the U.S. population, he noted. The service is intended to spare shippers the frustration of shipping their goods by rail or road to an East Coast port and then onto Europe. On CEE, goods will reach Europe two weeks after they reach Cleveland.
Much of this year’s growth in container shipments has been in consumer goods, retail and foodstuffs, he added. There is still a big imbalance in westbound and eastbound container movements, which means the Port has to convince more American companies to ship products to Europe through Cleveland.