Study Finds Great Lakes Shipping Saves Users $3.6 Billion Annually
A report by the Tennessee Valley Authority for the U.S. Army Corps of Engineers concluded that shipping on the Great Lakes saves its customers more than $3.6 billion a year when compared to the next least costly transportation mode. The report, "Great Lakes Navigation System - Economic Strength to the Nation," tracked the movement of 11 commodities on the Great Lakes with shipments totaling 173 million tons in 2006.
Great Lakes shipping serves iron mining, steel production, power generation and agricultural exports and the viability of these industries is tied to low-cost waterborne transportation.
The study also found that there are 44,000 jobs directly related to maritime transportation. In addition, a Great Lakes freighter travels 607 miles on one gallon of fuel using a per-ton-of-cargo basis. On that same basis, a truck travels only 59 miles while a train travels 202 miles. In terms of emissions, Great Lakes vessels produce 90 percent fewer emissions than trucks and 70 percent fewer emissions that trains. The 21-page brochure highlights the importance of Great Lakes shipping and details the investments needed. To obtain copies, please contact: Lynn Duerod, (313)226-4680.
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Legislative Update
Congress Approves Economic Stimulus
On February 14, Congress approved a $787 billion economic stimulus plan after a month of contentious debate. The 1000+ page legislation includes a number of initiatives of interest to the Great Lakes maritime industry. These include: $100 million in grants to be administered by the Maritime Administration for small shipyards; $2 billion for the Army Corps of Engineers' construction program; $2.075 billion for the Army Corps of Engineers' operation and maintenance program (of which $1 billion is to be spent on maintenance dredging); $150 million for Port Security Grants, and $300 million for the EPA's Diesel Emission Reduction program (helps retrofit heavy equipment at ports).
Harbor Maintenance Tax Legislation Introduced
Congressman John McHugh (R-NY) has introduced legislation (H.R. 528) that would provide an exemption from the U.S. Harbor Maintenance Tax for non-bulk cargo transported between U.S. ports, or between Canadian and U.S.ports on the Great Lakes/St. Lawrence Seaway System. Similar legislation (H.R. 638) has been introduced by Congressman Elijah Cummings (D-MD). The Cummings bill does not provide a tax exemption for break bulk cargo, but rather would only exempt containerized cargo and roll-on / roll-off cargo.
A number of harbor maintenance tax exemption bills had been introduced in the last Congress, including S. 1683, sponsored by Senators Debbie Stabenow (D-MI), George Voinovich (R-OH), and Carl Levin (D-MI); and H.R. 981, introduced by the late Congresswoman Stephanie Tubbs-Jones (D-OH), and Congressman Phil English (R-PA).
Senators Endorse Trust Fund Changes
A bipartisan group of 16 U.S. Senators urged Senator Barbara Boxer (D-CA), Chairwoman of the Senate Environment and Public Works Committee, and Senator James Inhofe (R-OK), Ranking Republican Member of the committee, to consider modifications to the Harbor Maintenance Trust Fund (HMTF). The February 9th letter urges the committee to provide the HMTF with the same budgetary treatment that has been granted to the Highway Trust Fund and the Airports and Airways Trust Fund. Under such a scheme, the flow of spending out of the HMTF will more closely match the flow of revenue into the fund.
The HMTF was established by Congress in 1986 to receive deposits from the Harbor Maintenance Tax and provide a source of dedicated revenue for the Army Corps of Engineers' maintenance dredging program. Despite a $4.7 billion excess balance in the HMTF, past Administrations have failed to fully fund the Corps' maintenance dredging program. The proposed modifications are supported by the Lake Carriers Association, the American Great Lakes Ports Association, the Dredging Contractors of America, and numerous other shipping associations.
Industry Challenges New York Ballast Rules
Several maritime industry organizations including: the American Great Lakes Ports Association, the Port of Oswego Authority, the Port of Albany, the Canadian Shipowners' Association, the Shipping Federation of Canada, the Chamber of Marine Commerce, Fednav, Polish Steamship Lines, and Canadian Forest Navigation have filed a legal challenge to the State of New York's Clean Water Act Section 401 Certification for the U.S. Environmental Protection Agency's "Vessel General Permit."
The additional New York regulations would require vessel operators to install ballast water treatment systems by January, 2012, and be capable of achieving a water quality standard 100 times greater than the standard established by the International Maritime Organization (IMO). Currently, there is no environmental technology that can meet such a standard. The regulations would apply to vessels visiting New York ports, and those vessels transiting New York waters.
LCA Challenges EPA Ballast Program
In a separate action, the Lake Carriers' Association has challenged the Environmental Protection Agency's (EPA) Vessel General Permit (VGP) in the D.C. Circuit Court. Environmental groups filed similar challenges in San Francisco and New York Federal Courts. The VGP was finalized in December, 2008. It requires all vessels operating in U.S. waters to carry out best management practices for a variety of discharges. The VGP incorporates a variety of additional state requirements,like the New York rules. The LCA's action hopes to resolve conflicting regulatory requirements, ensure that industry has the ability to comply with regulations and balance the debate with the voices of industry and the economy. In addition to the Federal action, LCA has filed or joined existing suits in several State Courts, including New York.
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Marine Highway Rulemaking
A number of Great Lakes maritime organizations, including the Lake Carriers' Association and the American Great Lakes Ports Association, submitted comments during February in support of the Maritime Administration's new "America's Marine Highway Program." Authorized by Congress in the Energy Independence and Security Act of 2007, the program seeks to establish the nation's first short sea shipping program. MARAD has proposed a two-tiered program that will formally designate short sea shipping corridors, and specific projects. While the program does not include grant funding at this time, many expect Congress to authorize financial assistance in the future. LCA did not endorse a specific trader route(s), but rather asked that the entire Great Lakes Navigation System be considered a marine highway.
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Maritime Community Supports New Poe-Sized Lock
The funding of a new 1000 foot lock at Sault Ste Marie, Michigan, depends on Congress. The $500 million project is expected to take 10 years to complete and is expected to employ up to 250 people annually. The maritime community has given strong support to the project and it is considered a 'shovel ready" project that could be underway by summer.
The Water Resources Development Act of 1986 authorized construction of a second Poe-sized lock but a lengthy funding debate has followed and it has not received federal appropriation.
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Trade Falls Sharply at the Close of 2008 -- Trend Continues in 2009
Trade totals on the Great Lakes for the year were up for some cargos but the quickly changing economic conditions hurt year end totals. U.S.-Flag cargo movement fell below one million net tons in January, for the first time since the recession in the mid-1980s. The
919,000 net tons of cargo hauled in January represented decreases that range form 73 to 80 percent.
Iron Ore
Trade for iron ore equaled 51.2 million net tons and was up by 1.1 million tons in 2008 over 2007 totals due to strong demand. Shipments exceeded the five-year average by 400,000 tons due to strong demand early in the year. That demand plunged in the last months of the year when many blast furnaces were idled as the economy slowed. No iron ore will be shipped in February.
In October shipments totaled 5.7 million net tons, a slight decrease from 2007 and the month's five-year average. In November, trade totaled 4.9 million net tons and December trade of 3.1 million net tons was a decrease of 42 percent compared to 2007. Only 26 U.S. Flag Lakers were in service the first of the year which is a decrease of 35 hulls compared to the first of 2007.
Limestone
Shipments of limestone totaled 32.4 million net tons in 2008, a decrease of five percent compared to 2007 and 16% below the five-year average. As recently as October, tonnage was up for the month 15% from the previous year, even though vessels were unable to carry full loads. In November tonnage dropped to 3.5 million net tons, a decrease of six percent from 2007. By December the economy was having a large impact on shipments which totaled 528,821 tons. This tonnage represents a 75% decreased compared to a year ago. The limestone trade is heavily dependent on construction and the steel industry.
Coal
For the year, coal shipments totaled 39.8 million net tons in 2008, a 1.3% increase over 2007 and a nearly one-million-ton decrease from the five-year average. Shipments in October totaled 4 million net tons, equaling the October totals in 2007. Segments of the trade around the Lakes varied with loadings at Lake Superior terminals up 13% and Lake Erie shipments down 20%, impacted by declining lake levels. November totals fell to 3.4 million net tons, similar to 2007 shipments. In January, shipments totaled 778,971 net tons, half the volume of one year ago.
The dredging crisis was a major factor in trade totals. Even when water levels were at their highest, the largest vessels had loads 4000 tons below capacity. Superior Midwest Energy Terminal in Superior, Wisconsin, set a record for shipments during the year with 22,354,161 net tons, exceeding its previous record by one million tons. Thunder Bay, Ontario, also saw an increase of 22.4 percent compared to 2007.
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Ports Report 2008 Tonnage Totals
Duluth-Superior reported that the number of international ships in port in 2008 was half the number in 2007. This season 69 ships called on the port, down from 158 in 2007. A total of 1126 ships called on the port in 2008 making it the busiest port in the Great Lakes. Combined domestic and international tonnage was down five percent in 2008.
Volume at the Port of Toledo declined by a little more than 10 percent during 2008. The decline was due to a 53 percent drop in grain cargoes. Just 22 salties called on the port, down from 38 in 2007.
A drop in domestic cargo resulted in a decrease in overall tonnage received in 2008. Domestic imports dropped from 2,069,500 metric tons in 2007 to 1,893,734 tons in 2008. This included a 19 percent drop in coal. Foreign shipments through the port saw a 19 percent increase from 2007 to 2008, 254,007 metric tons to 302,085 metric tons. Increases occurred in salt, wood pulp, pig iron and fuel oil.
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Shipping in the News
News articles
Journal of Commerce, Dec. 29, Seaway aims for tax change
Sault This Week, Jan. 6, Sault Michigan Superlock project is 'shovel ready for stimulus
Canada NewsWire, Jan. 6, Gold-headed Cane awarded at the Port of Montreal
Cargonews Asia, Jan. 6, Montreal Port looks for partners
Hamilton Spectator, Jan. 7, Sorry, lot, er port is full..almost
DetNews.com, Jan.8, Rising Great Lakes levels may give Michigan a lift
Globe and Mail, Jan.8, Great Lakes expected to be higher early in 2009
BizJournal.com, Jan. 12, Biodiesel firm buys Port of Milwaukee terminal
Welland Tribune, Jan. 14, Smoother waters are ahead for Seaway:Corfe
BusinessNorth, Jan. 15, Twin Ports shipping season comes to an end
Superior Telegram, Jan. 16, Shipping season closes
Port Huron Times Herald, Jan. 16, Cutter fleet may grow
Superior Telegram, Jan. 16, Ship ballast issue back in the courts
Environmental Data Interactive--UK, Jan. 21, Lake system 'highly sensitive' to climate change
SteelGuru--India, Jan.21, Lakes iron ore trade in December 2008 down by 42%
Oswego County Business Magazine, Jan. 22, McHugh Work to Expand Short Sea Shipping, Port of Oswego
BusinessNorth, Jan 24., Economic & Environmental Impacts of the shipping industry
BusinessNorth., Jan. 27, Great Lakes Shipping Annually Saves Users $3.6 billion
Discovery Channel, Jan. 29, Climate Change Could Drain Great Lakes
Duluth News Tribune, Jan. 29, Early Winter lay-up concerns industry & others
Cheboygan Daily Tribune, Jan. 30, Mackinaw shuffles off to Buffalo
Chicago Tribune, Feb. 2, Shipping industry runs short of mariners
BusinessNorth.com, Feb. 3, Sour economy halves Lakes coal trade in January
Press Publications, White Bear Lake, MN, Feb. 5, Environmental groups say ballast water laws must be strengthened
Elmira Star-Gazette, Feb.6, Massa co-sponsors Short Sea Shipping Act
BusinessNorth.com, Feb. 9, U.S. flag shipping three percent in 2008
KARE , Minneapolis, Feb. 10, Economic stimulus could get ships moving Duluth
BusinessNorth.com, Feb. 10, Lakes shipping slump still severe in January
BusinessNorth.com, Feb. 11, Oberstar guides new transportation bill
Toledo Blade, Feb. 14, Great Lake Shipping touting their green side
Editorials/Letters
The Plain Dealer, Jan. 31, Billion dollar Cleveland port relocation can't be justified |
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