By Alex Binkley
The St. Lawrence Seaway depends on others to generate the traffic to keep the system operational and financially sustainable. However, it should focus on what it can undertake to improve its competitiveness, say transportation industry observers. Mark Hemmes, President of Quorum Corp of Edmonton, says the Seaway needs to accentuate the positive in what it offers shippers. “A Great Lakes freighter can carry 25,000 tonnes of cargo. It takes 2.5 trains to move the same amount and the railways don’t always have the capacity available when the shipper is ready.”
Hemmes, one of the speakers at last fall’s Highway H20 conference, said in an interview the Seaway should focus on getting its costs in line. That includes everything from lock tolls to pilotage fees to harbor charges. Not only is it competing with the railways, it also has to keep pace with the Mississippi River-New Orleans route. Hazem Ghonima, President of TAP Consultants of Ottawa, says the Seaway should take a long-range view toward securing container traffic. While the waterway labours under the disadvantage of a 10-month season, the growth in size of ocean container ships could eventually work to the Seaway’s advantage. The ships are becoming so large that few ports on the East Coast will be able to accommodate them, said Ghonima, another of last year’s Highway H20 presenters. Halifax or another Canadian port that could berth these megaships doesn’t have the railway capacity to move all the boxes that could come off them. That will make feeder services from the port to inland destinations crucial, he said in an interview, noting that the use of containers in shipping is growing every year. Even grain and forest products industries, which have traditionally shipped in bulk, are increasing their use of containers for quality preserved movements.
Marc-Andre Roy, Vice President for North America of CPCS, recommends the Seaway and its partners take a team approach to promoting shipping via the waterway. “More can be done to improve competitiveness of the system, but the supply chain partners need to work together to succeed in driving collective business growth.” Another Highway H20 conference presenter, Roy suggested the Seaway supply chain work at promoting greater awareness of the waterway’s cost advantage. It should consider working at consolidating project cargo movements to attract regular shipping line service and even making Highway H20 entity into an arm’s length third party logistics provider. He said many shippers don’t realize the competitiveness of the Seaway-Great Lakes routing “because it can be exceptionally difficult to get quotes for Seaway routings.” It’s often more complicated to arrange a waterway routing than a railway one. Roy also encourages the Seaway to reduce operating costs as a means to solidifying its competitive advantages.
The Seaway does offer “clear cost advantages for many commodities.” They include petroleum products, exports of Canadian and American wheat and corn, imports and exports of manufactured steel, metallurgical coke and coal. However, there’s no guarantee that demand for those resources will continue into the future and that means the Seaway has to concentrate on positioning itself for whatever growth patterns emerge during the next few decades, he continued.
Last fall, CPCS completed a Seaway Competitiveness Study for The St. Lawrence Seaway Management Corp, the details of which are still confidential. Craig Middlebrook, the Acting Administrator of the U.S. Seaway Development Corp. (SLSDC) says the waterway needs to closely track the potential oil boom in the U.S. Midwest. “Significantly, the Great Lakes region finds itself squarely in the midst of this emerging energy landscape and stands to benefit from the transformational changes that are underway. The increasing amounts of oil and gas that will flow from these formations will be a boon to economic development throughout the Great Lakes region.” Middlebrook foresees the energy boom benefitting manufacturing companies in the region that will need the Seaway to move their products to foreign markets. The waterway has already benefitted from the delivery of components for oil and gas exploration as well as wind turbine parts. “The enormous potential for offshore wind development in the region could be even more beneficial.”
Talk of a cross-country pipeline to move Alberta oilsands crude to the refinery in Saint John, N.B., the only one in Eastern Canada capable of refining it, has groups looking at whether the crude could be moved more economically from Thunder Bay to Saint John by tanker with some winter supplying of the refinery by rail if needed. Currently, the refinery gets its Canadian supply by rail. Already CN and CP are laying plans to move Canadian crude by rail to American refineries in case the Obama administration turns down the XL Pipeline. Bruce Hodgson, Director of Marketing for the St. Lawrence Seaway Management Corp. (SLSMC) says preliminary studies by a consulting company show the water route could be viable financially and eliminate the need for a pipeline through Ontario, Quebec and New Brunswick. The Canadian tanker fleet has a good safety record with its modern, double hulled vessels. “We should be competitive and able to deliver on time year round with the ship/rail combination.”
The Seaway Corporations have introduced a series of measures during the last decade to streamline operations and have invested in upgrading facilities to reduce delays. SLSDC is in the midst a US$175 million federally funded multi-year Asset Renewal Program (ARP). The work includes maintenance dredging in the U.S. portion of the navigation channel, structural rehabilitation and corrosion prevention work on the Seaway International Bridge, gatelifter upgrades, upstream miter gate rehabilitation at both the Eisenhower and Snell Locks, and a number of other structural and equipment repairs and replacements. This year, SLSDC is installing an ice flushing system at Snell Lock, rehabilitating the downstream miter gate rehabilitation at Eisenhower Lock, and on-going upgrades to valve operating machinery at both locks. SLSMC is working on a five-year, $270 million asset renewal plan currently underway. Work ranges from concrete rehabilitation to replacement of lifting machinery to modernization. The work is aimed at ensuring “the long-term reliability of the Seaway and support the efforts by the ports and the private sector to move North American products and raw materials to global clients.”
The Seaway determines the effectiveness of its operations by measuring system availability. Overall last year, it achieved 99.6 per cent availability, exceeding its target level of 99.0 per cent, while system reliability was 99.71 per cent, slightly below the target level of 99.75 per cent. The average delay caused by Seaway operations was 16 minutes per transit in the Montreal-Lake Ontario Region, which is below the targeted 20 minutes. The Welland Canal came in at 24 minutes, which exceeds the 20 minute target.
While a lot of attention will be focused on the first of the new 20 Canadian freighters ships that will sail on the Great Lakes this summer, the Seaway has introduced its own new technologies. Middlebrook cites the Draft Information System (DIS) that helps ships determine more precisely the amount of clearance they have from the bottom, thus enabling the maximization of cargo loads while maintaining the same margin of safety. “This further enhances vessel safety and efficiency. A vessel equipped with DIS can now precisely gauge the amount of water under the ship’s keel, given satellite guided navigation combined with highly precise models of the channel floor.”
SLSMC has introduced various measures to automate its locks to make it easier for ships to pass through. This summer, it will run a full test of “hands off mooring” in a lock while it considers other measures to improve operational efficiencies.