After a tough year, St. Lawrence Seaway looks for ways to rebound
The St. Lawrence Seaway experienced a 14 percent decline in ship transits in 2009 compared with the year earlier, while cargo volumes fell to their lowest levels in almost four decades.
“The economic downturn during the last year has certainly impacted our traffic levels,” said Richard Corfe, president and CEO of the St. Lawrence Seaway Management Corp. The Seaway’s 2009 cargoes with its traditional primary core market of bulk commodities will be approximately 30 million metric tons, the lowest since 1961 or 1962, he said.
The 3,639 vessel Seaway transits in 2009 represented a 14 percent decline compared with 2008. The total cargo carried in 2009 declined 25 percent compared with the 43.5 million metric tons carried in 2008. Major cargo reductions were 42.6 percent for iron ore and 21.7 percent for coal, in part because of furnace shutdowns at steel plants in the United States and Canada as auto industry production was reduced.
Looking ahead, Corfe said, “Our concern is that these traditional cargoes, particularly iron ore and coal, are going to be slow recovering cargoes and ultimately may never come back.”
Grain cargo was the bright spot showing a 6.6 percent increase in 2009 compared to 2008.
The Seaway’s declines in ship transits and cargo volume mirrored both the long-term changes in the U.S. and Canadian industrial base and the current depressed global economic conditions.
The $165 million Asset Renewal Program is funding over 50 projects that will rebuild and rehabilitate the 50-year-old Seaway’s infrastructure. New technologies such as hands-free-mooring devices in the locks reduce a vessel’s equipment costs and crewing requirements, thereby increasing Seaway’s competitiveness.
As the economy moves toward a recovery in North America and the rest of the world, the Seaway’s management continues implementation of the “Fund It, Fix It, Grow It” strategic plan that began three years ago to ensure the Seaway remains a viable marine transportation asset, according to Collister Johnson Jr., administrator of the Saint Lawrence Seaway Development Corp.
“Grow It” hopes to counter long-term changes driven by a wide range of forces. While the Seaway’s general cargo and bulk cargoes declined 29.7 percent in 2009, these cargoes represent an area of potential growth as the economy improves. Container traffic should also grow again as the global economy recovers and the Seaway develops niche markets.
For example, Johnson noted that the new tug/barge service between Montreal and the Port of Hamilton, Ontario, avoids “some of the barriers that have impeded such service in the past” such as the 25 percent duty requirement that applies to containerships under Canadian laws.
Johnson believes the Seaway and the Great Lakes can grow the container market in an environmentally sensitive manner if changes in U.S. legislation are enacted to exempt short-sea shipping operations from the harbor maintenance tax.
Richard O. Aichele