By Keith Norbury
Work is underway on a $15 million project to modernize the Keefer terminal at the port of Thunder Bay that is expected to enhance the Port’s project cargo business. “We’ve had this in the books for quite awhile. But now that we have the funding, we’re going to push ahead with it,” said Tim Heney, CEO of Thunder Bay Port Authority. The project recently received a $7.5 million grant from the $2 billion National Trade Corridors Fund that federal Transportation Minister Marc Garneau announced in July.
“The project involves adding tracks and laydown areas for cargo staging and transshipment to respond to increased demand, and building a 4,645 square metre multi-purpose heated facility to suit requirements of terminal users,” a Government of Canada news release noted. The railyard part of the project is done, save for installing the rail itself, Mr. Heney said. “But we’re already using it for wind turbine laydown,” he added. Preloading of the area for the building foundation with gravel started in the first week of October.
The new heated building would be similar to one that the terminal opened in 2005. “The terminal here is mostly unheated space. And in Thunder Bay that’s a pretty tough sell,” Mr. Heney said.
More laydown area coming
The project, which earlier received $1 million from the Northern Ontario Heritage Fund Corporation, also involves tearing down an old building on the dock to create more laydown area for cargo, Mr. Heney said. “The fact that it’s on the dock is really an obstacle to our operations because most of our cargo is larger, outdoor cargo — steel, wind turbines, and things like that,” Mr. Heney said. Vasko Popovic, Operations Manager at Thunder Bay for Logistec Stevedoring, said the indoor storage won’t have a big impact on project cargoes his company handles because things like windmill parts “don’t really require indoor or heated storage.” However, Mr. Popovic said the additional rail trackage and laydown areas are “going to definitely improve” Logistec’s ability to serve customers such as those requiring rail deliveries of steel to Western Canada. Tearing down the old building on the dock “would be the most beneficial part” because it could potentially create two more laydown areas adjacent to the dock. “The most practical laydown area when you’re unloading a ship is the one that is close to the ship,” Mr. Popovic said. “The closer the better it is from a stevedoring point of view.”
A lot of what Logistec handles is steel pipe and steel rail. Ideally, shippers like to move rail in longer lengths because it reduces the need for welding the pieces together at the site. “So once you get over a certain size, like over 50, 60 feet, you’ve got to go by rail because trucking becomes really expensive,” Mr. Popovic said.
Big wind projects on horizon
As of July 2018, the cumulative total for the year of general cargo at Thunder Bay was 13,439 tonnes, just above the 13,282 tonnes in the same period in 2017. Those figures were a tiny fraction of the total of 3.7 million tonnes handled for that timeframe in 2018 and the 4.1 million tonnes in 2017.
For all of 2017, Thunder Bay handled 30,996 tonnes of general cargo, just under the 31,540 tonnes in 2016, which was the most at the port since 2008 when general cargo volumes totalled 65,818 tonnes. In 2002 and before, general cargo often surpassed 100,000 tonnes, including a 1966 high of 823,222 tonnes.
Mr. Heney predicted that 2019 will be a big year for project cargo at Thunder Bay because major wind energy projects are due to begin construction in Alberta and Saskatchewan.
In December 2017, the Alberta government announced it had chosen three companies to build four wind power projects totalling about $1 billion in value, and capable of generating a combined 600 megawatts, enough to power 255,000 homes, CBC reported. Meanwhile, SaskPower aims to increase its wind power capacity tenfold to about 2,100 megawatts by 2030. This September, the Saskatchewan government announced a 177-megawatt wind project near Herbert that would produce enough power for 70,000 homes, as noted by CBC.
“So, wind cargoes are going to be strong for the next two to three years, is what they’re saying,” Mr. Heney said.
One thing Thunder Bay hasn’t handled to Mr. Heney’s knowledge is any project cargo destined for the Site C dam project in northern B.C. (See related story). But Thunder Bay has handled projected cargoes, such as massive cranes, going to and from the Alberta oil sands, as well as transformers for Manitoba Hydro projects. Other recent projects included a mining camp from Saskatchewan that was shipped to the Caribbean, and a modular hotel from Poland that moved to Calgary in 2017. Mr. Heney is also hoping that Thunder Bay will also handle project cargo, including pipe, for the $40 billion LNG Canada project in Kitimat that just received the blessing of the NDP government in B.C.
Of late, Thunder Bay has received wind turbines from Germany, but they have also arrived from Denmark and Spain. They arrive on ocean-going vessels directly from Europe and are unloaded at Thunder Bay before going by truck, or sometimes by rail, to their ultimate destinations in western Canada. “And, generally they take grain back to Europe as backhaul,” Mr. Heney said.
Worth more than their weight
The port’s official statistics record the volume of project cargo in tonnes, which can be misleading for bulky yet relatively light cargoes such as windmills. “They’re not heavy but it doesn’t take too many of them to fill up a ship,” Mr. Heney said. For that reason, it makes sense to record such cargoes in freight-tonnes, which the port does internally, but which numbers the Portdoes not publish.
Mr. Heney said project cargo is important to the port for reasons that outweigh the volumes alone. “One is so that the ships are never travelling empty at any part of the voyage,” Mr. Heney said. “All the costs of the Seaway are absorbed by cargo going both ways (to) make it more efficient.”
Handling project cargo is also much more labour-intensive than handling grain. “You can get up to 50, 60 people working around Keefer just on this cargo,” Mr. Heney said.
Project cargo also provides other employment, such for specialty truckers and fabricators. Work of the latter include welding wind turbine parts to rail cars or trucks, and cutting the welds that secure turbine components to the ships.
“It does provide a lot more spinoff in terms of economic development in the community than normal bulk cargo does,” Mr. Heney said.
Among the companies that are hoping to benefit from additional project cargo opportunities at Thunder Bay is Fabmar Metals Inc. Fabmar provides services to support stevedoring at the port, including securing cargoes on truck and rail cars, said owner Dale Ryynanen by email. “All I can say is if the volume at the port increased, we should see more opportunity to increase our volume of work and that should increase our work force as well,” Mr. Ryynanen said.
Back in 2004, Keefer was handling a lot less cargo and only had about 25 employees, Mr. Heney said. Today about 150 people work there, he estimated.
“So it’s taken awhile, but I think we have the mass, the critical mass now, the reputation to keep it going,” Mr. Heney said.
Also enhancing the port’s project cargo handling is the Liebherr EHM 320 mobile harbour crane that went into service in 2012. At the time, Jan Beringer, President and CEO of Calgary-based project freight forwarders Rohde & Liesenfeld Canada Inc., said the crane would enable the port to “to bring plug-and-play modules from Asia into Thunder Bay and reload them onto either truck or railcars,” something that was previously not cost-effective because cranes had to be mobilized from outside the port. Mr. Heney said the crane, which can lift 104 tonnes at 36 metres, is performing as expected. “You can use it all around the yard as well as unloading ships — so loading trucks and railcars and things like that,” he said. “You can move it anywhere you want in the terminal. Yes, it’s been an interesting addition.”
When the terminal bought the crane in the wake of the 2008 recession, it might not have seemed like the greatest deal at US$2.4 million even though the U.S. dollar was then at par with the loonie. But then again, Thunder Bay’s business was picking up, Mr. Heney said. In a similar way, Thunder Bay is now receiving steel from Europe, such as structural steel from Luxembourg and rail from Spain, in part because of the recent steel tariff battle between Canada and the U.S. “Most of that used to come out of the U.S. to Western Canada,” Mr. Heney said. “We’re kind of contrarians here,” he added later. “When there are issues impacting other places, we seem to do better. It’s not a rule, but just an observation.”