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Seaway corporation floats container idea to shippers.

With East and West Coast container ports bursting beyond capacity and shippers pulling their collective hair out over delays at intermodal yards, the St. Lawrence Seaway Management Corporation is giving them something to think about.

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As part of their Hwy H2O marketing initiative, the corporation is promoting container shipping on the Great Lakes with the arrival last month in Duluth, Minn. of a twenty-foot equivalent unit (TEU) from Europe.

Loaded at the Danish port of Aarhus in July, the specially marked container docked at the most-western Great Lakes port on Aug. 2 aboard the German-owned vessel BBC India. The modern 142-metre-long multi-purpose 'tweendecker,' was also carrying windmill parts.

Although the container was empty, it's the kickoff of an advertising campaign intended to get major shippers talking about transportation alternatives. The container will spend the rest of the shipping season visiting various partner ports including Thunder Bay.

For Aldert van Nieuwkop, the Seaway's marketing development director, the thirteen-and-a-half day sailing time on this inaugural run from Denmark to Duluth--a day earlier than originally estimated--provided a "good demonstration of the competitiveness of marine."

By normal modes, van Nieuwkop says that same containers would have taken three to four weeks after arriving in a hub port like New York, Halifax or Montreal, stored in a terminal, then transferred onto rail or truck to its final destination.

Bottlenecks at hub ports in North America are creating logistical nightmares.

"These ports were not laid out to cope with container storage and people started to charge terminal fees," says van Nieuwkop. "The cost is going up and feasibility of containers is becoming less and less."

That well-known inventory management term, Just-in-Time (JIT) delivery, has become a misnomer to shippers with overseas cargo. "It's more like just-in-case," says van Nieuwkop

"JIT works domestically between Canada and the U.S. by truck, but when (shippers) are depending on ocean haul from India and China, it's not that reliable anymore."

The Seaway wants to eventually replicate the European short sea-shipping model with an inland feeder system of modern container-handling infrastructure.

If feasible, shipping large volumes on the lakes would be a radical shift away from the Seaway's historically predominate bulk cargoes of iron ore, coal and grain.

Thunder Bay Port Authority's CEO says he's ready to jump aboard the concept.

"We'll welcome any kind of new diversified cargo," says Tim Heney. "We're very encouraged someone is trying to diversify what the Seaway does, to re-invent itself and capitalize on the available capacity that's there."

To Heney and Seaway officials, containerization represents an important growth market and could generate significant two-way traffic for ports along the 3,700-kilometre marine system.

Heney says of the 8.2 million tonnes annually handled through Thunder Bay, almost six million tonnes is exported grain. But increased competition over the years from rail, truck and other ports on the Pacific Coast and Churchill, Man. caused grain shipments to decline at the Lakehead through the 1980s and 90s.

He believes containers can help revive that business through their connections with the Oil Patch.

The Thunder Bay authority is marketing itself in Western Canada as the entry point for European-manufactured goods destined for Alberta.

Twice this year, they've delivered presentations to Calgary oil industry executives to promote Thunder Bay as the place to land steel plate, pipe, re-bar and large dimensional equipment.

"We don't have (the) population base here to demand imports of any major size so we have to be a furtherance point to Alberta," says Heney. "They're absorbing material from all over the world."

But instead of shipping empty containers back east, Heney says a great back-haul opportunity is containerized grain. Sea-going container facilities have been built in Saskatchewan, including the opening of Moose Jaw's MCS Agri-Terminals in 2003.

"If we can attract more (oil industry) business, we have the natural back-haul set up right here with the biggest grain storage (facility) in Canada."

The authority recently installed a Top-Lifter at Keefer Terminal capable of handling a 45-tonne container. It'll be put to use this fall when windmill parts arrive from Europe destined for Tabor, Alberta.

Heney says talk of containers on the Great Lakes is nothing new. "But with the transportation demand around the world, there's (container traffic) pressure on every coastal port that's projected to double in the next 10 years."

A reliable and efficient container system might also persuade the forest industry to look beyond their primary U.S. markets and consider exporting globally, he adds.

For better efficiencies, Heney says foreign vessels must be able to transit the entire Seaway system, rather than transfer cargo from ocean-going ships onto smaller Great Lakes vessels.

At one time, the Seaway's business potential was thought to be limited because larger saltwater ships couldn't access the St. Lawrence River and Welland Canal locks.

But smaller self-unloading 'salties' of 8,000 tonnes deadweight are making regular appearances in Thunder Bay. The freshwater fleet of Canadian and American vessels make up about 75 per cent of the port's traffic, however Heney says these modern foreign ships represent their "biggest potential for growth."

Some major shippers have already expressed interest to the Seaway corporation in using an Interlake service for consumer goods. "We've spoken with the likes of Wal-Mart, Home Depot, Canadian Tire and they're keenly interested to find complimentary alternatives to rail because they're very dependent on one sole provider," says van Nieuwkop.

For now, container traffic on the lakes remains in its infancy, largely due to the lack of modern container-handling facilities. Van Nieuwkop says that infrastructure must be in place before big shippers will commit.

The European Union has designed a long-range intermodal transportation policy, offering incentives by penalty or credit for shippers to use environmentally friendly modes of transport. "That's something we've missed here in Canada," says van Nieuwkop.

"Given that the dynamics of transportation are changing around us, the market is pushing for alternatives and the growth alone will push us to have other modes of transportation to provide capacity in the system."

In July, the Hwy H2O marketing initiative signed a memorandum of cooperation with a German port group, Seaports of Nedersachsen, to promote trade and generate business opportunities between northern Europe and the Great Lakes-St. Lawrence Seaway System through joint marketing.

Van Nieuwkop says partnering with the railways, their long-time competitors, is vital to finding new solutions since ships don't deliver to the factory or retail doorstep. "We have to put our heads together and decide what's best for Canada and use each other's strengths.

"Rather than fight, it's much better to cooperate where it makes sense to work closely together. We're talking to smaller rail lines, since the (major) Class One's really haven't embraced this as an opportunity and they see (Great Lakes containerization) as a threat. But they'll come around."

www.hwyh20.com

www.portauthority.thunder-bay.on.ca

www.duluthport.com

www.tc.gc.ca/shortsea

By IAN ROSS

Northern Ontario Business
COPYRIGHT 2006 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:SPECIAL REPORT: TRANSPORTATION; Hwy H20
Author:Ross, Ian
Publication:Northern Ontario Business
Geographic Code:1CANA
Date:Sep 1, 2006
Words:1155
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