Future Transportation Business on the Great Lakes and Seaway
In early September of 2018, the United States General Accounting Office (GAO) released their most recent audit on maritime operations along the Great Lakes and Seaway. The numbers advise that since the 1950’s and 1960’s, the tonnage of cargo moved by across the Great Lakes declined by 50 percent from 157 million tons to 78 million tons by 2016, also declining by 32 percent from 115 million tons in 1980. Between 1980 and 2016, the tonnage moved along the St Lawrence Seaway had declined by 48 percent, from 74 million tons to 39 million tons.
North American inland waterway transportation predated the development of their railway industry, with horse drawn stagecoaches being the main form of overland transportation. At the time, wind powered riverboats and lake boats could move much greater volumes and weight of cargo at much lower prices than horse drawn overland transportation. The size, sailing depth and generous wind energy on the Great Lakes along with easy access to timber for ship building, resulted in the development of large sailing vessels that carried passengers and trade over greatly extended distances, at very low transportation prices.
By the time the railways extended from the Atlantic coast to the Great lakes region, the lake based ship transportation industry was sufficiently well established to remain viable and competitive and especially in terms of moving large machinery and bulk cargo. Prior to the year 1900, a single navigation lock of 800-foot length and 100-foot width was built at the eastern end of Lake Superior to connect to Lake Huron. At the time, lake ships could carry the tonnage of a fleet of steam-hauled railway trains and at a fraction of the transportation cost.
During the ear of steam railway traction, steam locomotives were very costly to maintain and the railways rode of rails of 40-foot length that also required frequent maintenance. Railways generally avoided operating heavy trains each propelled multiple steam locomotives, each with their own crew. While a single crew could through multiple unit technology, operate multiple early diesel-electric locomotives on a single train, the assembly of early generation diesel locomotives delivered the equivalent horsepower of a single large steam locomotive. While the railways could offer faster delivery schedules, the ships continued carrying mega-shipments of iron ore, coal and limestone.
As output of diesel locomotives increased, the railways developed “unit trains” with multiple locomotives spread throughout extended length trains, such as the trains that carry Wyoming coal. Except that Lake ships, coastal ships and even coupled assemblies of river barges can carry greater volume and greater tonnage of bulk freight at lower transportation cost than the railways. The steady post-1980 decline of the American manufacturing sector reduced the volume of coal and iron ore delivered to lakeshore industrial areas such as Detroit, Cleveland, Toledo and Erie. Revival of that sector may be possible.
Between 1980 and 2015, North American railway freight traffic increased by 82 percent from 932,000-ton-miles to over 1,700,000-ton miles, with container freight accounting for much of the increase. During an earlier era and with the exception of unit trains that operated through mountainous terrain, the railways typically coupled groups of locomotives at the front of freight trains. However, several railway companies are operating extended length freight trains with groups of locomotives coupled at both the front and in the mid-area of trains that travel on track with short and gentle gradients between major cities.
A jointly undertaken study undertaken in 2007 by Canadian and American officials revealed that the Great Lakes and St Lawrence Seaway were operating at an estimated 50 percent capacity. In 2015, some 40 percent of Seaway tonnage was moving between Canadian ports, with cross border trade accounting for 34 percent of tonnage and with international trade involving ports located upstream of Montreal accounting for only 10 percent of traffic. At the time of its construction during the late 1950’s, the Seaway was built to transit the largest of the most popular size of freight ships that sailed the oceans.
Ships of that era have been progressively replaced by progressively larger ships that are too long, too wide and too deep to sail upstream of Montreal. Several years ago and prompted mainly by the Canadian government, the United States Army Corps of Engineers undertook a study on enlarging the navigation locks upstream of Montreal to allow Panamax size of ships to sail to Lake Ontario. The environmental movement strongly opposed the proposal to dredge sections of the Upper St Lawrence River between Montreal and Lake Ontario to transit the larger ships.
Bigger Ships and Declining Market
While the idea of sailing larger, higher capacity ships on the Upper Great Lakes during a period of declining market might seem impractical, the operating cost of the larger ship being marginally higher than that of the smaller ship. Larger ships would carry greater tonnage of bulk freight at lower transportation cost per ton and per ton-mile that smaller vessels. Larger ships would require fewer departures to move the same amount of seasonal tonnage and reduce seasonal operating costs over smaller vessels. Reducing transportation costs for customers would allow them to divert revenue to their business development.
The Davis and Sabin navigation locks at Sault Ste. Marie were built in 1914 and 1919 respectively and to an interior length of 1,350 feet by 80 feet width by 23 feet water depth. Most of the Upper Great Lakes ship traffic of some 10,000 transits per year passes through the single Poe Lock rebuilt in 1968 to a length of 1,200 feet length by 110 feet width by 32 feet water depth. The out-of-service locks could be built to 1600 feet length by 145 feet width by 32 feet depth to transit future two-section coupled vessels, including supersized tug-barge vessels to carry bulk freight.
The ocean going cruise ship industry developed following the decline and near closure of the trans-Atlantic passenger ship industry that had lost customers to the jet airline industry. Ship industry senior managers rebranded their passenger ships as mobile hotels that offered a wide variety of onboard entertainment and that stopped at attractive ports of call, some of which were owned by the cruise ship sector. During an early era, passenger vessels plied the waters of the Great Lakes, St Lawrence River and Mississippi River. At the present day, various designs of passenger vessels carry tourists on cruises along inland waterways.
Cruise voyages that originate from Boston, New York City and even European ports sail along the St Lawrence Seaway, the Erie Canal and across the Great Lakes with small vessels of 80 to 100 passengers sailing along the Ottawa River, Rideau Canal and Trent-Severn Waterway. The size of the navigation locks restricts the size of cruise vessel that may sail along waterways that connect to the Great Lakes. A larger navigation lock on the Upper Great Lakes could encourage consideration of a larger cruise ship that would include much of the onboard entertainment common to oceanic cruise ships.
Ferry services operate at numerous locations around the Great Lakes and along the St Lawrence River The market niche of ro-ro ferry services is to carry vehicles while offering shorter travel distance and reduced travel time at lower cost, that the road journey, as is the case of both the Milwaukee – Muskegon and Manitowoc – Ludington ferry services on Lake Michigan. North of Chicago, ro-ro ferry services allow road vehicles to bypass traffic congestion on busy Chicago roads and highways. On Lake Ontario, a ferry periodically sails the shorter distance between Toronto and St. Catharines than the road/railway distance.
Ferry services also provide transportation between mainland and islands located along the Seaway and Great Lakes. A possible future market niche for large ro-ro ferry ships could involve carrying trucks along part of their journeys, during truck driver compulsory overnight out-of-service rest stops. Possible ro-ro ferry links for trucks would include Duluth – Sault Ste. Marie (U.S.), Thunder Bay – Sault Ste. Marie (ON), Sault Ste. Marie (ON) – Victoria Harbour and Hamilton (ON) – Johnstown (ON). The combination of truck-and-ferry transportation services could offer faster delivery times and marginal savings in transportation cost for cargo being transportation along selected links.
The seasonal trans-Atlantic operation of 44 sailings of a 1,000-TEU container ship between Antwerp and Cleveland offers future possibility for Great Lakes international container shipping. While smaller than ships that sail into Montreal and Newark, this diminutive vessel offers competitive transportation costs between Antwerp and Cleveland, avoiding the high cost of railway transportation on the Newark – Cleveland and Montreal – Cleveland links. A ship sailing via the Panama Canal from Asia to Newark offers some $2,500 savings in per container transportation costs compared to transfer containers to transcontinental container trains at Port of Long Beach.
The voyage via the Panama Canal incurs additional three to four days in total time-in-transit and serves a sufficiently large market segment that is willing save transportation costs. That market segment not only exists in Newark and Cleveland; that market segment may also be present at many other locations along the Seaway and around the Great Lakes. The possible develop a container terminal for neo-Panamax size container ships at Quebec City could serve that market segment by transferring containers to inland container carrying vessels sailing into the Seaway and Great Lakes.
Atlantic Container Transshipment
If opposition from Montreal prevents development of a maritime container transshipment terminal at Quebec City, then transshipment would have to occur at Nova Scotia. The direct sailing distance between European ports and Newark is almost identical if a 12,000-TEU container ship stopped at Halifax to load or offload up to 5,000-TEU, with maritime transshipment connections to Boston, Portland along with Seaway and Great Lakes ports. Within the next few years, twin channels through the Suez Canal and development of India’s Port of Vizhinjam could see ships of over 25,000-TEU being fully offloaded at Port of Sydney transshipment terminal.
A fleet of smaller interconnecting vessels would carry containers to several U.S. East Coast ports as well as ports located along the St Lawrence River, Seaway and Great Lakes. Present Canadian regulation would result in self-propelled Seaway-max size vessels carrying low-priority containers arriving at Ports of Ogdensburg (NY), Cleveland (OH), Detroit (MI) and Chicago (IL). Tugs flying Canadian flags would move low-priority containers on barges (C.O.B. transport) to Canadian inland ports such as Quebec City, Montreal, Johnstown (ON) and perhaps Hamilton. Worsening road traffic congestion near Toronto’s docks could make future maritime-truck container transfer at that location impractical.
Mega-size container ships are arriving at Western Mediterranean ports such as Barcelona, Valencia and Tangier. The precedent of the Antwerp – Cleveland container ship service could serve as the basis to develop container transshipment between mega-ships arriving from Asian and North American bounds Seaway-max ships at one of the Western Mediterranean terminals. The Seaway-max ships would take on container trade from Asia at the Mediterranean transshipment ports before sailing to Seaway and Great lakes ports such as Ogdensburg (NY), Johnstown (ON), Toronto (ON), Detroit (MI) and Chicago (IL). Such operation would prevail until Eastern Canadian transshipment ports open for business.
Winter Storage Capacity
Container shipments related to the retail industry reach peak volume in the weeks prior to the Yuletide Season, with a decline following Boxing Day and coinciding with the annual winter closure of the Seaway to shipping. During the closure, vessels including dry bulk carriers are tied at port with potential to use the interior space of some out-of-service vessels for winter storage for the retail industry. There are also many vacant and abandoned shopping malls and former factories located close to the Great Lakes in one of America’s industrial heartland regions.
For the container shipping industry, there is the combination of available floating storage capacity as well as available land-based storage capacity that the retail industry could utilize during the duration of the Seaway annual winter closure. During this period, the supermarket retail trade operates at a cyclical low. The future success of container shipping into the Great Lakes will depend on access to an abundance of winter storage capacity for the retail industry, in addition to competitive transportation costs from Europe and the Indo-Asian region.
Ground Effect Transportation
Wing-in-ground (WIG) effect vessels are winged boats that travel close to the water surface. While Type-A versions of the technology can climb to an elevation equal to 45 percent of its wingspan, Type-B versions can climb to elevations of 500 feet (150 meters) and allowing for touch down and lift-off at coastal airports. Severe wave conditions would require the option of operation to/from coastal airports such as Grosse Ile Municipal Airport south of Detroit, Mackinac County Airport at St. Ignace, Sault Ste. Marie Airport (Canada), Toronto Island Airport (Lake Ontario) and Kingston Airport (Ontario).
Combined with seaplane lift-off and touch down on water, WIG vessels could operate such links as Toledo – Buffalo, Detroit – Buffalo, Chicago – Mackinac (St. Ignace), Detroit – Mackinac (St. Ignace), Chicago – Milwaukee, Chicago – Sheboygan, Thunder Bay – S.S. Marie (Canada), Duluth – S.S. Marie (U.S.) and Toronto – Kingston (ON). Between mid-September to early in June, recreational boat traffic is minimal and during winter, WIG vessels may be the only vessels capable of traveling above the ice covered Great Lakes, at speeds of 100 to 300 miles per hour while burning less fuel that commercial aircraft.
The GAO has shown that the Seaway and Great Lakes have undergone a long-term reduction in bulk freight maritime transportation. There may be future prospects of developing container transportation by connecting overseas ports to Seaway and Great Lakes ports. Comparatively small container ships could feasibly sail directly between European and Seaway/Great Lakes ports. Connection to Indo-Asian ports would involve the combination of large oceanic ships and transshipment terminals either at Quebec City or at Nova Scotia, where smaller container ships would interline with the oceanic mega-giant carriers.
Overseas, there has been growth of the inland waterway cruising industry and some growth in cruise vessel activity along the St Lawrence Seaway and Great Lakes. There may be potential to develop a market for a large cruise vessel to operate on the Upper Great Lakes. Ferry services already operate along the Seaway and across some of the Great Lakes, with future potential to expand the ferry market. There may also be potential to introduce and operate WIG effect vehicles into service on the Great Lakes, to offer fast and cost competitive passenger transportation services.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.