By Alex Binkley
The St. Lawrence Seaway plans a 2 per cent toll increase and a 2 per cent hike in wharfage fees for 2016 even though it handled almost 9.5 per cent less traffic by tonnage during 2015 compared to 2014.
The Seaway is retaining its existing toll incentive programs and adding a new Gateway Incentive program for traffic moving through the Seaway-Great Lakes that was shipped by other routes in the past. “We think there is a lot of cargo like this we could be moving,” says Terence Bowles, President and CEO of The St. Lawrence Seaway Management Corporation. The increases are needed to help finance the Seaway’s ambitious infrastructure modernization program. It will also introduce a weight or measure charge for general cargo and the removal of the surcharge for over-dimensioned cargo. The traffic drop during 2015 was hardly surprising given the sluggish state of the North American economy during 2015, Bowles added in an interview. The Seaway carried 36.1 million tonnes of freight in 2015, compared to 39.9 million tonnes the previous year.
While the recovery in the U.S. economy has injected some optimism into the Seaway’s outlook, it sees little prospect for a rebound in coal shipments, which dropped 40 per cent year over year because of low demand in North America and Europe. Betty Sutton, Administrator of the Saint Lawrence Seaway Development Corporation, said the 2015 navigation season saw highs and lows in traditional cargoes while “general cargo to and from international and domestic markets remained high with over a 100 per cent increase. Project cargo and dry bulk materials to support the construction and manufacturing industry also remained in positive standings.”
Bowles added, “The Seaway is the bellwether of the economy. In the overall picture, the global economy is not doing well and the demand for our products was off.” With the United States economy showing signs of recovery, and a mild winter so far in North America, he’s hopeful 2016 will get off to an earlier than usual and more productive start in March. “We’re feeling better on our prospects for this year. As well, grain shipments of 10.8 million tonnes during 2015 were well above their five year average and dry bulk and general cargo also came in above the five year average. These are real signs of resilience,” Bowles said.
Leading the decline were coal shipments with a 40 per cent tumble to 2.5 million tonnes, followed by grain, off 1.3 million tonnes, or 10.9 per cent. Other drops were in general cargo, down 487,000 tonnes or 15.4 per cent, liquid bulk off 399,000 tonnes or 11.53 per cent and dry bulk 166,000 tonnes or 1.7 per cent. Iron ore was the one positive category rising 3.8 per cent to 7.1 million tonnes as the long struggling steel industry showed signs of life.
The 2015 grain decline was mostly the result of a return to a normal more harvest after the record Prairie crop in 2013. The port of Thunder Bay, one of the main east-bound shipping points for Prairie grain, had its second-best season in 15 years. The lower shipments put pressure on the Seaway’s financial results, which will be released later. “We’re working to reduce our cost side by pushing ahead with the modernization of our locks,” Bowles noted.
One highlight in 2015 was an award from OECD for the Promising Innovation in Transport Award. The award recognized the Seaway’s pioneering work in developing, with supplier Cavotec, the world’s first Hands-Free Mooring system for ships transiting locks. The use of this equipment will largely replace the traditional practice of manually securing ships in locks with steel mooring lines, enabling the Seaway to orchestrate gains in operating efficiency and safety, and become more competitive.