Container shipping crisis an unmet opportunity on Great Lakes

TOLEDO — The St. Lawrence Seaway could help save Christmas by bringing decorations, Santa suits, dolls, video games, and scooters to retail outlets in the United States and Canada. The global container shipping crisis that has ships piling up at massive West and East coast ports is presenting an opportunity for Toledo and other Great Lakes ports. But local and federal officials in both the United States and Canada must change their mindset and act quickly if they hope to impact this year's holiday season. An executive order from President Biden might be required to jump-start the process. "It is unconscionable that the most utilized shipping method in the world — the container — is not being utilized on the Great Lakes," said Paul C LaMarre III, director of the Port of Monroe, whose agency has recently expanded into handling container ships. "We need a buy-in from all parties and need everyone to realize this is a viable opportunity." U.S. Rep. Marcy Kaptur (D., Toledo) said the crisis of delivering needed consumer goods to the heartland from international producers has revealed a lack of leadership. "The ports are not working on this and they have a very narrow view of their job," Kaptur said. "Their vision is locked into the old model of the original Seaway corridor when the global market is moving to multimodal connects of sea-rail-highway for on-off load cargoes." Only leadership is preventing Toledo from capturing this growing market, she said. "Toledo has those assets," Kaptur said. "If leveraged with capabilities across other Great Lakes ports in Canada and the U.S., the system could be much more robust." Professor Paul Hong, a global supply chain expert at the University of Toledo, said the time to make the case for Great Lakes ports is now. Outside coastal ports such as Long Beach/Los Angeles, Savannah, Ga., Charleston, S.C., and Newark/New York, heavily loaded ocean-going container vessels are stacked to the horizon because of worker shortages and other complications in the troubled supply chain. It means shortages and delays in delivering electronics, holiday decorations, household cleaning materials, semiconductors, and pharmaceuticals — not to mention toys for under the Christmas tree. Shoppers in the Toledo area and throughout the country increasingly face empty shelves. Parents and grandparents in search of Scruff-a-Luvs rescue pets, DC Comics action figures, or TeeTurtle Octopus Plushies might come home empty-handed. "I could only find two things at one place, and I snatched them up," said Pam Smith, a Toledoan who started her holiday shopping early in anticipation of the extreme shortages. The Seaway is touted as "the shortest route to the heartland of North America" and since the Great Lakes region collectively would rank as the fourth-largest economy in the world, this could be a strong link in the supply chain that is not being fully utilized at this crucial juncture. The Great Lakes boasts a busy bulk shipping trade, but it has very little containerized cargo. Nine years ago, Cleveland recognized the potential and installed a container port, now reported to be making a modest profit after having subsidized a European shipper, Spliethoff Group of Amsterdam, to use the port. The Port of Monroe is constructing one now, in hopes of starting to unload container ships by 2023. "I absolutely believe that the Great Lakes and the St. Lawrence system are a major part of the solution to getting goods to the heartland of America," LaMarre said. David Gutheil, chief commercial officer of the Port of Cleveland, said Cleveland's success shows there is an opportunity for the Great Lakes ports. Gutheil said a container shipping industry existed on the Great Lakes in the 1970s, and since the Port of Cleveland started handling containers about eight years ago, that business has more than doubled in volume. As the only port on the Great Lakes now handling containers, Cleveland is looking into feeder services in Halifax, N.S., and Montreal where containers could be off-loaded from the huge ocean-going ships and transshipped down the St. Lawrence Seaway via smaller vessels and dispersed throughout the Great Lakes region. "We've proven you can save transit time by moving materials on an all-water route," he said, adding that after initially using combination bulk cargo/container ships, Cleveland recently added a container-only vessel that handles "anything you can think of" including auto parts, foodstuffs, and manufactured goods on its United States to Europe and return routes. William Friedman, the Cleveland port's president and chief executive officer, said the potential exists for such cargo to grow using the St. Lawrence Seaway System, both in volume and geography, but to do that will require long-term shifts in how government, freight shippers and receivers, and vessel operators view the market and the transportation playing field. Shippers using the Cleveland service, Friedman said, have been attracted by faster transit times, avoidance of congestion around East Coast ports, and more responsive customer service. With the big coastal ports and the railroads that forward their traffic to and from inland terminals, "your container goes into a black hole" once it's picked up, he said, whereas with the carrier moving the Cleveland trade, "you can talk to someone instead of just getting a (container) tracking number. "It will take years of policy reform and planning across the supply chain ... to really change what we've built up over decades," the Cleveland port president said. Europe offers a model for how container shipping could work in the Great Lakes, Friedman said. It makes extensive use of "short-sea shipping" and inland rivers to move containerized freight aboard barges and smaller ships that transfer that freight between smaller ports and the major centers like Hamburg and Rotterdam. Halifax could become a similar waypoint for containers to and from the Great Lakes, he said, without becoming entangled in legal constraints over what ships and mariners can be used for ship movements strictly between one U.S. port and another. "The shippers would be there in a heartbeat," Mr. Friedman said. "But you need to get the supply side (ship companies) to buy in ... (and) you've got to have government support for this to happen." It may take tearing down the current St. Lawrence Seaway management structure and rebuilding it from the ground up to overcome impediments that now exist, he said. Those impediments include the variable length of the Seaway's shipping season and the cost ships incur to hire locally qualified pilots to direct vessels through the channels, locks, and harbors in the system, Mr. Friedman said. While needed, pilots are something the government could provide at a relatively small cost to the taxpayer while inducing "billions in transit cost savings." Craig Middlebrook, the deputy administrator of the Great Lakes-St. Lawrence Seaway Development Corporation who for nearly five years has been its acting head, said Great Lakes ports are progressing toward the ability to handle containerized cargo. Duluth, Minn., at the head of Lake Superior just completed the process to get U.S. Customs & Border Protection clearance to begin container operations, and LaMarre's port in Monroe is very close to that point as well. The Port of Cleveland and the Spliethoff Group, the Dutch shipping line operating the Cleveland-Europe Express service to and from Antwerp, Belgium, established "the test case," and now with the supply-chain issues in the coastal ports, the Great Lakes are in play, Middlebrook said — especially in regard to the East Coast. "Any port on Lake Erie is well poised" to establish container business, he said. "The Lakes have capacity. There is no congestion," he said. While the canal locks' size and channel depths establish limitations, for "extremely high value or time-sensitive shipments, it's an option." John D. Baker, general organizer for the International Longshoremen's Association based in Cleveland, said Toledo could add a container operation if it wanted. But he reiterated that the St. Lawrence Seaway is too narrow to handle the kinds of container ships that go to coastal ports. For the smaller container ships like those tying up at Cleveland, it's just a matter of space, of which he said Toledo has plenty. "You don't need that much room, unless you're storing a lot of containers," he said. "We would definitely support it. You've got a lot of open land there." He said the most likely way that Great Lakes ports would have a significant role in global shipping is if a feeder system develops in which smaller ships that can enter the St. Lawrence Seaway offload from the behemoth ships. "I would think it would (happen), at the rate we're going," Baker said. He said Toledo's port operator, or stevedore, Midwest Terminals of Toledo International, has to decide whether to add container shipping. "If the stevedore doesn't bid on containerization, they don't get any containers," Baker said. The port authority owns the port facilities but leases them for operation to Midwest, whose president, Alex Johnson, did not return a phone call seeking comment. ONE VOICE More than 60 years ago, the Toledo-Lucas County Port Authority was the first port authority in Ohio. The goal was to promote shipping in Ohio and ensure Toledo's port operations could handle the expected surge in grain and manufacturing exports that officials anticipated the St. Lawrence Seaway would generate — or risk losing that business to rival Great Lakes cities. The Seaway was under construction, which would finally allow ocean-going vessels to reach the Great Lakes and Toledo's natural harbor at the west end of Lake Erie. Toledo maintains its status as one of the busiest and most diverse ports on the Great Lakes. Still, the big dreams of the 1950s have failed to materialize, confounded by changes in world markets, politics, energy sources, and the evolution of transportation itself. Hong, UT's distinguished university professor of global supply chain management, is impatient with port managers on the Great Lakes. He said the infrastructure bill in Congress has about $1 billion in it for Great Lakes improvements, and that Congress would allocate more if the Great Lakes states were more effective at lobbying. "This has to be done through the Great Lakes leaders working together. The West Coast, the East Coast, the Gulf Coast, they speak with one voice. But in the Great Lakes they are not speaking with one voice," Hong said. He said Great Lakes leaders have a case to make that the Seaway can help relieve some of the pressure on the other ports. "Those things need to be done very quickly and vigorously. There's a number of studies that have been done, but except for the studies, I don't know how vigorously these port authorities take advantage of these opportunities. Definitely, the St. Lawrence Seaway has potential. This is the right time to make the sales pitch, but I don't really see that kind of effort by these leaders. They are just sitting there," Hong said. He added that while the 60-year-old locks in the St. Lawrence Seaway are not large enough to handle the huge cargo ships stacked high with containers that are common on the open ocean today, the waterway funnels ships from all trading nations on the globe and can move freight efficiently on smaller vessels. About 90 percent of Seaway traffic in recent years has been bulk cargo — grain, coal, iron ore, chemicals, and oil. But containers are the worldwide shipping mechanism of choice for moving many of the products that could be missing this Christmas. The 370 miles of Seaway from Montreal to Lake Erie, which handles 154 million tons of cargo annually, are managed by the St. Lawrence Seaway Management Corp. in Canada and the St. Lawrence Seaway Development Corp. in the United States. The system of locks, canals, and channels in Canada and the United States permits oceangoing vessels to travel from the Atlantic Ocean as far inland on the Great Lakes as Duluth, Minn., at the western end of Lake Superior. Local officials are frustrated that federal port funding is focused on the coasts. "I think that that is the exact opposite of what needs to be happening," said LaMarre, who is the vice president of the American Great Lakes Ports Association. "The investment needs to be made into the transportation network that moves the homegrown goods of America. "We are talking about the steel in your automobile, the coal keeping your lights on, the limestone in your driveway, and the grain on your kitchen table," Mr. LaMarre said. THE FOURTH COAST Kaptur said it is time for America to rethink how the Great Lakes can be better used for transportation. She said she constantly reminds members of Congress from the East and West coasts that the Great Lakes are the nation's "fourth coast," after the Gulf Coast. Much of the responsibility for a new vision goes beyond each of the region's port authorities and lies with the Washington-based Seaway agency, Kaptur said. "Frankly, I think the Seaway authority in Washington hasn't met its full potential," she added. "They have reverted to a model of interlake trade (and) are not keeping up with globalization." The world has changed and so must Great Lakes trade. "The Great Lakes Seaway Development Corp. has to meet the challenges of a new day," Kaptur said. Created in 1954, the corporation's mission is to serve the U.S. intermodal and international transportation system by working with Canada to maximize the seaway's potential. It hasn't done that for years, instead allowing the region to be satisfied with the seaway's strong emphasis on grain, coal, iron ore, chemicals, oil, and other types of bulk cargo, Kaptur maintains. In this modern era of globalized trade, that isn't good enough. The vision needs to become more diversified, Kaptur said. Kaptur said she believes more can be done to offload goods from containers at major ports, and get those items transported by ship into America's heartland. Once contemplated was a possible U.S.-Canada venture in which overseas container ships could be loaded and offloaded at the Strait of Canso in Nova Scotia, northeast of Halifax. Rail infrastructure currently in place would make it possible for shipments to come and go from the Toledo area, Kaptur said. "There is a pathway, but it would take cooperation between the governments of Canada and the United States," she said. Staff writers Tom Henry and Jason Webber contributed to this report. ___ (c)2021 The Blade (Toledo, Ohio) Visit The Blade (Toledo, Ohio) at www.toledoblade.com Distributed by Tribune Content Agency, LLC.