By Alex Binkley

The St. Lawrence Seaway has rebounded strongly enough from a delayed start to fuel speculation about whether it can match or surpass its 2013 traffic total of 37.1 million tonnes. To the end of this July with five months left in the shipping season, 15.1 million tonnes of cargo had moved through the system, just under 4 per cent less than at the same date last year. “It’s been quite the turnaround,” Bruce Hodgson, Director of Marketing for The St. Lawrence Seaway Management Corp., says in an interview. “We lost four weeks in getting going and we’ve seen a major shift in the commodities we’re moving.”

Hodgson credits the massive carryover in Prairie grain stocks and resurgence of general cargo movements for the Seaway’s rebound this year. All signs are they should continue to the last day of the season. He doubts that 2014 tonnage could catch the 39.1 million tonnes recorded in 2012. In 2011, the Seaway handled 37.5 million tonnes.

Last winter, before the extent of the ice problem on the Great Lakes became evident, the Seaway was hoping that the rebounding American economy would boost its 2014 tonnage to more than 40 million tonnes of cargo.

Greg Wight, President and CEO of Algoma Central Corp., said the four weeks of navigation lost to heavy ice in March and April “will be hard to recover from completely. We’ll be moving grain as fast we can.” In addition to grain, he expects salt shipments will be higher this year as cities and highway departments build up depleted stock piles after last winter. He also says the domestic iron ore trade has been good this year. “There has been a strong demand from our steel making customers.”

Canadian and American grain shipments to the end of July were 55 per cent above 2013’s numbers at 4.1 million tonnes. Canadian grain shipments were 70 per cent greater than at the same point last year. The Seaway “has always been a strong export route for grain, but this season has really demonstrated that farmers would have been in great difficulty without it,” Hodgson notes. “Marine shipping on the Seaway is preventing huge transportation bottlenecks and we’re looking forward to moving the next harvest this fall.”

Also on the positive side for the Seaway, general cargo movements of imported steel and related products rose 60.1 per cent to 444,000 tonnes. “The increase in general cargo is mostly because of the increased steel demand from the automobile industry,” Hodgson said. “All forecasts suggest that this trend will continue.” These cargoes are not only important for what they bring into the system but also because the ocean-going vessels transport grain out as a backhaul.

In the negative column, iron ore shipments were 37 per cent lower at 2.9 million tonnes while coal dropped 16.5 per cent to 1.9 million tonnes. Hodgson says the drop is a reflection of soft world prices for the two commodities rather than an indicator of the health of the American economy. International ore prices are in the $90 to $95 a tonne range, he points out. Shipping ore from the Great Lakes to foreign buyers such as China is only viable when ore is in the $125 a tonne range. Coal sales to Europe are also off because of the delayed start to the season.

Dry bulk movements such as cement, gravel and salt, came in at 3.7 million tonnes, about one shipload and a bit less than in 2013. Liquid bulk was off 39 per cent to 1.3 million tonnes. The number of vessel transits was only 85 ships less than at the same point last year, another indication of how much the system has rebounded since the spring. “We expect to see that number keep growing,” Hodgson says.

Now, with a massive carryover of grain from the 2013 crop expected and a 2014 harvest that’s predicted to be better than average even though parts of Saskatchewan and Manitoba couldn’t be planted, the Great Lakes-Seaway system should be busy well into 2015, he explains.

Grain shipments were low last year because of a late harvest, farmers holding onto their crops in hopes of receiving better prices and terrible weather on the Great Lakes in November and December that hindered shipping. This year, ocean and domestic vessels have carried more than one million metric tonnes of grain out of the port of Thunder Bay in each of May, June and July, and August is expected to be the same. 

Rob Bryson, Vice-President of P&H Grain Group, which has handling facilities in Thunder Bay, Goderich, Owen Sound, Port Colborne and Hamilton, says that in addition to the record Prairie crop last year, Ontario and Quebec farmers produced bumper crops last summer and likely will again this year. There has been “a match-up of big crops and strong global demand,” he points out. The Seaway “has been critical to export these huge volumes from the Prairies as well as the Eastern Canada inventories. We simply couldn’t have shipped it all without this navigation system. It looks like we’ll be busy right up to the next harvest.  And we should have a strong last quarter through the Seaway with the next crop.”

Tim Heney, President and CEO of Thunder Bay Port Authority, says the port has 1.2 million tonnes of storage capacity and “we have the ocean and domestic carriers to handle these volumes. With forecasters talking about another good harvest on its way, we are optimistic that grain companies will continue to see the Great Lakes-Seaway as the competitive and reliable route for exports to world markets.”

Rebecca Spruill, Director of Trade Development for The St. Lawrence Seaway Development Corp. said, “When compared to July of last year, double the number of foreign flagged ships from as far away as Korea and Taiwan transited through the Seaway.” They carried “high value cargoes like steel, wind components, and machinery that arrived from 13 different countries.” Shipments of wind turbine equipment for major energy projects under construction in Michigan and Minnesota accounted for a major portion of the general cargo destined for U.S. ports.

One issue no one is talking about this year is low water levels, which are higher than they have been for decades. The main reason appears to be last winter’s long and snowy duration combined with a cooler summer and frequent rains. However, Lake Carriers Association says they’re still not high enough to allow U.S.-flag freighters to carry full loads. “The rise in water levels has allowed vessels to carry larger cargos than a year ago,” says LCA President James Weakley. However, the U.S. ports still need more dredging and recent legislative progress in Washington may make this possible.

The largest iron ore cargo moved by a U.S.-flag laker through the Soo Locks so far this season was 69,576 tonnes, almost 5,000 tonnes below the maximum. The largest coal cargo through the Soo Locks totaled 67,992 tonnes, nearly 5 per cent less than the record of 70,903 tonnes.

The U.S. Army Corps of Engineers estimates approximately 18 million cubic yards of sediment clog Great Lakes ports and waterways and pegs the cost of dredging that volume at more than $200 million. The Harbor Maintenance Trust Fund, the depository for a tax levied on cargo to pay for dredging, has a surplus of more than $8 billion.