Vol.37 No.3 JAN‑MAR 2009

V O L U M E 3 7 J A N U A R Y – M A R C H 2 0 0 9 N U M B E R 3 CELEBRATING THE Great Lakes/St. Lawrence Seaway System G L RETROSPECTIVE n INFRASTRUCTURE n COMMODITIES n VESSELS SHIPBUILDING n MARKETING n HISTORIC TIMELINE n STATISTICS 50 The Interlake Steamship Company Interlake Corporate Center 4199 Kinross Lakes Parkway Richfield, Ohio 44286 Telephone: (330) 659-1400 FAX: (330) 659-1445 ISO Certified E-mail: sales@interlake-steamship.com WE CAN HANDLE IT! Prepared for Tomorrow? At Interlake Steamship, investing in the future is a top priority. Our state-of-the-art electronic charting, positioning and communication systems add up to superior navigational safety. Our electronic load controllers and skewed propeller blades keep Interlake’s diesel propulsion engines running at peak efficiency. Repowering of MV Lee A. Tregurtha ensures her continued reliable operation. These are just a few examples of Interlake’s long-term commitment to its customers. Interlake Steamship – prepared for today, and prepared for tomorrow. GREAT LAKES/SEAWAY REVIEW January-March, 2009 1 Welcome A CELEBRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Great Lakes/Seaway Review creates a special edition to commemorate the industry’s evolution, greatest moments. The Celebration: 50TH ANNIVERSARY CELEBRATIONS . . . . . . . . . . . . . . . . . . . . 5 U.S. and Canada schedule commemorative events. Publisher’s Message THE SEAWAY AT 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 A personal reflection. The SystemTHE GREAT LAKES/ST. LAWRENCE SEAWAY SYSTEM . . . . . . . . . . 10 A vital waterway—past, present and future. Retrospective OUR TRIUMPHS AND FAILURES . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Davis Helberg provides a retrospective on his 50 years working in the system. Timeline GREAT LAKES/ST. LAWRENCE SEAWAY HIGHLIGHTS . . . . . . . . . . . . . 21 A chronology of nearly 400 years of highlights. System Funding TO THIS DAY, A WORK IN PROGRESS . . . . . . . . . . . . . . . . . . . . 22 Financing operations of the St. Lawrence Seaway. The Next 50 Years ADVANCING THE REGION’S INTERESTS . . . . . . . . . . . . . . 28 Government, carriers, ports, labor and terminal leaders discuss key factors to the system’s growth. A Seaway Administrator’s Perspective FROM PORT DIRECTOR TO SEAWAY ADMINISTRATOR . . . . . . . . . . . . . . . . 45 Dave Oberlin shares his experience in the Great Lakes/Seaway system. Infrastructure SIGNIFICANT AND LONG-LASTING BENEFITS . . . . . . . . . . . . . . 54 Infrastructure investment in the Seaway has brought 2.3 billion tons of cargo worth $350 billion in the last 50 years. Boatwatching FOLLOWING THE BOATS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Boatnerds enjoy old and new favorites as conditions change through the decades. Commodities THE EBBS AND FLOWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Commodity movements are a barometer of technology, economic trends and politics. Statistics A CENTURY OF GREAT LAKES COMMERCE . . . . . . . . . . . . . . . . . . . . . 80 Traffic, tonnage numbers. Commodities IRON ORE AND THE SEAWAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Iron ore mining had a major impact on establishing the St. Lawrence Seaway, creation of the Seaway had a significant impact on the iron ore mining industry. Marketing the SystemBUSY, BUSY BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Bi-national Seaway Trade Missions have a mission to increase trade. Technology SHIP MODERNIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Technology has changed the sailing experience. Shipbuilding BUCKETS AND BELTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 The evolution of the self-unloader. Shipbuilding PUSHING CARGO ALONG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 ATB utilization on the rise. Shipbuilding PERSONAL REFLECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 50th anniversary aligns with another beginning. Boatwatching KNOW YOUR SHIPS AT 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Tom Manse’s passion sails on. Great Lakes People LURE OF THE LAKES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Father and son share a bond and a freshwater legacy. Marine Photography LIGHTS OF THE ST. LAWRENCE . . . . . . . . . . . . . . . . . . . 118 Some are accessible and some are obscured, best viewed from the river. J A N U A R Y- M A R C H 2 0 0 9 Business and Editorial Office 221 Water Street Boyne City, Michigan 49712 USA (800) 491-1760 FAX: (866) 906-3392 harbor@harborhouse.com www.greatlakes-seawayreview.com www.greatlaker.com EDITORIAL AND BUSINESS STAFF Jacques LesStrang Publisher Emeritus Michelle Cortright Publisher Janenne Irene Pung Editor Rebecca Harris Art Director Lisa Liebgott Production Manager Tina Burch Business Manager Roger LeLievre Great Laker Editor Virginia Forrand Circulation Manager ADVERTISING DEPARTMENT Kathy Booth Account Manager James Fish Director of Sales John H. Nikolai Account Manager William W. Wellman Senior Account Manager EDITORIAL ADVISORY BOARD John D. Baker, President, Great Lakes District Council, International Longshoremen’s Association; Davis Helberg, Executive Director, Seaway Port Authority of Duluth – Retired; Anthony G. Ianello, Executive Director, Illinois International Port District; John Jamian, President, Seaway Great Lakes Trade Association; Peter Kakela, Ph.D., Professor, Department of Community, Agriculture, Recreation and Resource Studies, Michigan State University; Donald N. Morrison, President, Canadian Shipowners Assn.; Rep. James L. Oberstar, Member of Congress, Chair, House Transportation & Infrastructure Committee; John J. Peacock, Executive Vice-President, Fednav Limited; George Ryan, President, Lake Carriers’ Association – Retired; Daniel L. Smith, Former National Executive Vice President, American Maritime Officers; Rep. Bart Stupak,Member of Con gress, Energy & Commerce Committee; James H.I. Weakley, President, Lake Carriers’ Association; Jerome K. Welsch, Jr., President & CEO, American Steamship Company. SUBSCRIPTIONS – (800) 491-1760 or www.greatlakes-seawayreview.com www.greatlaker.com Published quarterly. One year $30.00; two years $50.00; three years $70.00. Foreign: One year $45.00; two years $65.00; three years $95.00. Payable in U.S. funds. Back issues available. Article reprints are also available. Reprints produced by others not authorized. ISSN 0037-0487 SRDS Classifications: 84, 115C, 148 Great Lakes/Seaway Review and Great Laker are published quarterly in March, June, September and December. Postmaster: Send address changes to Great Lakes/Seaway Review, Great Laker, 221 Water Street, Boyne City, Michigan 49712 USA. © 2009 Harbor House Publishers, Inc., Boyne City, Michigan. All rights reserved. No article or portion of same may be reproduced without written permission of publisher. THE INTERNATIONAL TRANSPORTATION MAGAZINE O F M I D C O N T I N E N T N O R T H A M E R I C A VOLUME 37 NUMBER 3 www.greatlakes-seawayreview.com JANUARY-MARCH, 2009 Lake Superior Lake Michigan Lake Huron Lake Erie Lake Ontario St. Lawrence For 50th Anniversary information go to the Seaway’s website: www.greatlakes-seaway.com CELEBRATING THE 50TH ANNIVERSARY OF THE ST. LAWRENCE SEAWAY More than 2.3 billion tons of imported and exported cargo, worth $350 billion, has moved through the Seaway in the last 50 years. Construction of the St. Lawrence Seaway brought about a five-fold increase in cargo tonnage into and out of the Great Lakes. Today’s Seaway is: • Technologically advanced • A solution to surface traffic congestion • An environmentally friendly transportation option • Ready to move bulk, boxed, and oversized cargo Transporting the Future via the St. Lawrence Seaway EFFICIENT • RELIABLE • SAFE • ENVIRONMENTALLY FRIENDLY U.S. Anniversary Celebration July 9-12, 2009, Massena, New York July 9 Construction Workers Honored July 10 Opening Ceremonies July 11 Anniversary Parade, Fireworks July 12 Open House at the Eisenhower Lock There will also be exhibits and displays focusing on the history of the Seaway over five decades, a number of special marine vessels present, and participation by U.S. and Canadian dignitaries. If you have photographs or historic documents relating to the construction and opening of the St. Lawrence Seaway, please call Vicki Garcia at (315) 764-3208 or vicki.garcia@dot.gov GREAT LAKES/SEAWAY REVIEW January-March, 2009 3 W E L C O M E Once in our lifetimes we’ll experience the 50th Anniversary of the St. Lawrence Seaway. As with all anniversaries, this provides us with an opportunity—as an industry—to look at where we’ve been and where we’re going. Where we’ve been includes our predecessors witnessing the opening of a man-made engineering marvel. The years that immediately followed entailed deepening the river and channels, and making improvements at ports throughout the Great Lakes. Where we’re going is up to us—each of us. The Great Lakes/St. Lawrence Seaway system is filled with entrepreneurs who refuse to take no at face value. Instead, we adapt our businesses plans as times and circumstances change. We have advocates in Washington, D.C., Ottawa and beyond who champion for our future. We are a collection of people who, through our individual contributions, move the system forward. At Great Lakes/Seaway Review, our role includes providing reliable information and analysis, as well as advocating for and unifying the system. When planning this issue of the magazine, our vision spanned the past, present and future. We have designed the contents to be a mixture of solid historical information and forward-thinking ideas to assist our industry partners in launching the Seaway into the next era. We believe we’ve accomplished that, with the help of each person who poured hours of research and writing into the stories. We trust that these pages will become an international reference guide for shipping on the Great Lakes/St. Lawrence Seaway for years to come. Within this commemorative edition, you will find one-of-a-kind retrospectives by David W. Oberlin, Davis Helberg, Dr. Peter Kakela and Roger LeLievre; in-depth analysis of the system’s funding, infrastructure transformations and commodity trends; a roundtable with a cross-section of experts discussing the system’s next steps; a look at shipbuilding, including the evolution of shipboard technology; an exhaustive timeline of the system that dates back to 1680; and an assortment of statistics, quotes and tables that will long be referenced. A list of anniversary events taking place in the U.S. and Canada is also found inside. This issue is representative of how the day-to-day business of shipping impacts our lives. It becomes woven into the fabric of who we are, it is the basis of life-long friendships and even tests our fortitude when tough times present themselves. Since the system isn’t currently experiencing record tonnage totals, let’s use this anniversary as a time to see the greater picture. This positive mindset will be a key component in creating momentum for tomorrow. Of this I’m sure, the Great Lakes/St. Lawrence Seaway community is a hearty one—willing to stand the test of time, be innovative in creating new trade routes and cargo types, hold our cards close when need be and make referrals when we can’t get the job done ourselves. One day while thinking through the magazine’s details on my way to the office, I realized that my role in Great Lakes/Seaway Review, and in this industry, is much more than a job. I’ve been entrusted with a vision that was birthed from the Seaway’s 10th Anniversary. What an honor. When 2009 has come and gone, Great Lakes/Seaway Review will continue to look for the events and trends that influence our livelihoods. As a team, we’ll always look for and report on the solutions rather than the problems. This issue, and every issue, is more than a magazine to us. We hope you feel the same. Welcome to Great Lakes/Seaway Review’s 50th Anniversary edition. Janenne Irene Pung, Editor n A celebration Great Lakes/Seaway Review creates a special edition to commemorate the industry’s evolution, greatest moments 50 A Vital Waterway… Past, Present And Future. GREAT LAKES/SEAWAY REVIEW January-March, 2009 5 On June 26, 1959, Her Majesty Queen Elizabeth II and President Dwight Eisenhower officially opened the St. Lawrence Seaway at ceremonies held in Montreal. In 2009, the U.S./Canadian St. Lawrence Seaway is celebrating its 50th anniversary, half a century of serving global commerce with a secure, efficient, reliable and cost competitive transportation route connecting the Great Lakes to the world. To recognize the opening of a system that is now known as America’s Fourth Seacoast, both the U.S. Saint Lawrence Seaway Development Corporation (SLSDC) and the Canadian St. Lawrence Seaway Management Corporation (SLSMC) are hosting events. T H E C E L E B R A T I O N 50th Anniversary celebrations U.S. and Canada schedule commemorative events www.fednav.com Open Road Congratulations to the St. Lawrence Seaway on the occasion of its 50th Anniversary. GREAT LAKES/SEAWAY REVIEW January-March, 2009 7 T H E C E L E B R A T I O N U.S.-hosted events. The SLSDC’s primary anniversary celebration is being held July 10-12 in Massena, New York. Events open to the public include opening ceremonies at the Seaway’s Visitors’ Center on Friday afternoon, July 10. An anniversary parade will take place on Saturday, July 11, with fireworks held at the New York Power Authority Visitors’ Center that evening. A closing ceremony will be held at the Seaway’s Visitors’ Center on Sunday, July 12. There will also be exhibits and displays focusing on the history of the Seaway over five decades. A number of special marine vessels are expected to be ‘in town’ for the festivities as are a number of U.S. and Canadian dignitaries. In addition, a number of other local community events and activities are being planned in conjunction with the Seaway’s 50th anniversary, some taking place in the months prior to the anniversary weekend. Canadian-hosted events. The SLSMC has activities planned throughout 2009 to celebrate the waterway’s jubilee. SLSMC will mark the opening of the navigation season in March with anniversary -themed ceremonies, hosting a number of dignitaries, distinguished guests and industry stakeholders. Guests will have an opportunity to view displays of historical Seaway memorabilia and witness the dedication of a 50th Anniversary plaque. The Black Watch Royal Highland Regiment of Canada, which was present in 1959, will salute the first vessel, adding a festive note to the opening of the anniversary season. In June, SLSMC will host an open house at each of its main office locations to celebrate the official opening with local communities and the general public. In line with the anniversary theme, “A vital waterway… past, present and future,” Anarrative spearheaded by The St. Lawrence Seaway Management Corporation (SLSMC) and an oral history authored by Claire Puccia Parham are publishing this year. The SLSMC’s 120-page book, “The St. Lawrence Seaway: Fifty Years and Counting,” is an official history of the waterway’s first five decades. “We’re celebrating because the Seaway has been an enormous success,” says SLSMC President Richard Corfe. “It is one of the safest and most reliable waterways in the world.” The book is roughly half text and half photos, with the images selected to illustrate and enhance the editorial. Toronto- based writer D’Arcy Jenish, a noted historian and awardwinning author of six other books, spent two years on the project. “The St. Lawrence Seaway” is a colorful and compelling narrative that captures every major development and setback of the Seaway’s first 50 years. Based on interviews, newspaper reports and official Seaway documents, the book also includes definitive accounts of: • Construction of the Welland Canal Bypass. • The Seaway-driven shipbuilding boom of the 1960s and 1970s. • Development of the C-Loop self-unloading system. • Development of the Quebec/Labrador iron ore deposits and the huge grain sales to the USSR that drove Seaway traffic to record levels by the late 1970s. information stations will be created to educate the public about the waterway, its structures, people, history and plans for the future. Guided tours to areas of interest, such as the Operations Centre, are being planned for pre-selected groups. The open house events will seek to enhance public awareness of the system and its benefits, as well as to underline the historical significance of the Seaway’s opening. In addition to the major events, anniversary flags will be offered to commercial vessels, as well as to pleasure craft that transit the Seaway system during specific periods. Anniversary banners will be displayed on Seaway buildings and infrastructure. Commemorative memorabilia is also being distributed by SLSDC during its functions. Visit www.greatlakes-seaway.com to view additional details and information about the anniversary celebrations. n • Development of the Highway H2O brand and the creation of a marketing partnership that includes the Canadian and American Seaway organizations, port authorities, shipping companies, shippers and other partners. “The St. Lawrence Seaway and Power Project: An Oral History of the Greatest Construction Show on Earth” is a culmination of a century-long dream to link the Great Lakes interior industrial hubs to the Atlantic Ocean. The book reveals the human side of the project in the words of its engineers, laborers and carpenters. Drawing on firsthand accounts, Parham provides a vivid portrait of the 22,000 workers who built the Seaway. Dubbed as the greatest construction project on earth and the largest waterway and hydro dam project ever jointly built by two nations, the project consisted of seven locks, widening canals, taming rapids and erecting the 3,216-footlong Robert H. Saunders Power Dam. For information on purchasing a copy of “The St. Lawrence Seaway: Fifty Years and Counting,” in either French orEnglish, please visit www.greatlakes-seaway.com or www.penumbrapress.ca or call Penumbra Press at (613) 692-5590. For information on purchasing a copy of “The St. Lawrence Seaway and Power Project: An Oral History of the Greatest Construction Show on Earth,” please go to www. syracuseuniversitypress.edu n Commemorating the 50th Anniversary Two new books publish to share the Seaway’s history We meticulously research, ponder and write an average of 55,000 words for each issue. Right now we have just one for you. Thanks Thank you for making us the voice of the Great Lakes/St. Lawrence Seaway System The first issue Publisher’s statement envisions magazine’s role There’s a job to be done along the St. Lawrence Seaway and among the inland seas we call the Great Lakes. The job is one of development, of information, of persuasion. Lake ports can grow no faster than shipping will permit. Shipping cannot grow beyond the capacities of the ports. Yet neither has come close to reaching their present potential, and will not until the savings in time and in dollars is fully understood by those who make the decisions on how and when and where to move goods. To the ends of development and information the Seaway Review dedicates itself. This publication will inform, encourage and, yes, persuade. It will inform readers about developments along the Seaway route and about the Seaway itself. It will inform readers about port activities, about regional news and become a forum for the exchange of ideas relating to the economic and socioeconomic development of the Lakes, the Seaway and the eight states which comprise the Seaway region. It will encourage professionalism in port development, operation and communication. It will encourage greater utilization of the outstanding facilities which today exist on the Lakes. It will persuade those persons and organizations which are housed within the region to look about themselves and to become more interested in growth potential. It will persuade them to become interested in regional transportation problems and their solutions. There are problems with the Seaway, to be certain. But nearly 50 million tons of goods find their way through the channels and locks, to the sea, each year. The capacity of the Seaway has not been met, but we can reach a little higher, and in so doing, come a bit closer to the goals established for this largest inland waterway in the world. The Seaway has been called the greatest engineering feat in the history of mankind. To help it achieve its’ full economic purpose, and to accrue resultant benefits for the port cities, the Seaway states and the region is the stated purpose of this publication. It is the further goal of Seaway Review to work toward a unity among the Seaway states and the organizations which support and further their objectives. The Seaway Review ultimately aims at becoming the voice of a strong, united Seaway region. With these thoughts firmly in mind, the first issue is put to bed and this publication is officially, if unceremoniously, launched. Jacques LesStrang Publisher, Seaway Review June, 1970 221 Water Street, Boyne City, Michigan 49712 U.S.A. (800) 491-1760 • FAX: (866) 906-3392 www.greatlakes-seawayreview.com • harbor@harborhouse.com GREAT LAKES/SEAWAY REVIEW January-March, 2009 9 P U B L I S H E R ’ S M E S S A G E Seaway Review was launched 40 years ago, as part of the 10th Anniversary celebration of the St. Lawrence Seaway. It has been our pleasure to serve the Great Lakes/St. Lawrence Seaway maritime community ever since. The fundamental role that Great Lakes/ Seaway Review has played over this time has been to unite the region’s ports, fleets and maritime organizations into a “system.” This 50th Anniversary Commemorative Edition of Great Lakes/Seaway Review has been a real joy for us to produce. It has evoked many memories and brought together many longtime friends. We are especially proud of the documentation of the industry that this issue provides. It is personal for us, as we are Midwesterners, and the maritime heritage of the region is woven into the fabric of our lives. We can think of no better place to live, no better community to be a part of. In 1969, my father, Jacques LesStrang, started the magazine in Ann Arbor, Michigan. He had become familiar with the St. Lawrence Seaway by working on the promotion of the Seaway’s 10th Anniversary as an account with his international advertising agency. I worked with him on that very first issue and throughout my college years, preparing subscription mailings and promotions and joined him full-time in 1976. I took over day-to-day operations when he moved to California in 1980 for health reasons. Eventually I bought the business from him. A highlight for us both was his 1985 award as the first Great Lakes Person of the Year. I received the same award in 1995, and now the two plaques hang side-by-side in my office. Seaway Review has been “more than a magazine” the last four decades. We have been, and continue to be, a staunch advocate for the region and for the maritime sector. Seaway Review has advocated for and been involved with the following initiatives, and many more: • Forgiveness of the St. Lawrence Seaway construction debt • Elimination of tolls on the U.S. Seaway • Season extension demonstration studies • Ontario Maritime Study (Misener Report) • Co-host of European Union Coal Mission • Replacement icebreaker for the Great Lakes • Great Lakes Task Force legislative initiatives • Founding member of the Great Lakes/St. Lawrence Maritime Forum • Active participant in bringing the Province of Quebec into partnership with the eight Great Lakes states and Province of Ontario Michelle Cortright is President/CEO of Harbor House Publishers, Inc., which publishes Great Lakes/Seaway Review and a number of custom annual directories and visitors guides for Chambers of Commerce and Convention & Visitor Bureaus throughout the Midwest. Harbor House Publishers is a magazine, book and newsletter publisher with a specialty in regional and custom publications which views its client relationships as one of partnership. Harbor House has recently acquired Greenwood’s Guide to Great Lakes Shipping and will publish the 2009 edition in late spring. Above: Michelle Cortright with her husband, Rod, and their son Michael. Below: Michelle and her father, Jacques LesStrang, who founded the magazine in 1970. The Seaway at 50 A personal reflection • Signatory to the Declaration of Indiana • Advocate for a new Poe-sized lock at Sault Ste. Marie • Partner in the current visioning sessions for the system’s next 50 years Over the years there have been a couple of internal changes to the magazine. In 1997, our name was expanded from Seaway Review to Great Lakes/Seaway Review to better represent the region the magazine has always served. In 2003, we integrated Great Laker into our pages, adding the cultural maritime heritage and human interest element that we always wished we could cover. With the addition of Great Laker we were exposed to another dimension of Great Lakes talent and developed new friends, including Roger LeLievre, Gary Martin, Chris Winters, and many more. Great Lakes/Seaway Review would not be “The voice of the Great Lakes/St. Lawrence Seaway System” without the excellent and dedicated work of our superb team. Editor Janenne Pung provides direction, research and many thousands of words of copy every quarter. Art Director Rebecca Harris keeps our pages fresh, inviting and beautiful to read. Tina Burch provides administrative focus and organization to keep the business side of the magazine flowing. Director of Sales James Fish leads a team of dedicated Account Managers and provides wisdom and perspective from his knowledge base of the region. There have been so many mentors and colleagues who have been special to us through the decades. Long-time former editor Dave Knight provided the magazine with editorial focus and direction for 17 years. We have had the pleasure of working with many “founding fathers” of the Great Lakes/Seaway system, including David W. Oberlin, Paul Trimble, Bob Lewis, Col. Leonard “Hank” Goodsell, Hugues Morrissette, Frank Kudrna, Jim Hartung, John Seefeldt, Rear Adm. Anthony Fugaro, Davis Helberg, Tony Ianello, George Ryan, Vera Paktor and many, many more. While our region and world is currently undergoing a time of change and restructuring, we believe the future of the region is bright. The freshwater resource and the maritime transportation system of the Midcontinent will bring the next era of prosperity to our doorstep. Thank you for allowing us to serve you. Michelle Cortright Publisher Great Lakes/Seaway Review 10 www.greatlakes-seawayreview.com T H E S Y S T E M The Great Lakes/St. Lawrence Seaway system: • A marine highway that has handled more than 2.4 billion metric tons of cargo • Saves its customers more than $3.6 billion a year in transportation costs compared to other modes • Has transported more than $350 billion worth of goods • Provides 44,000 direct jobs and more than 192,000 indirect jobs • A dependable route that transports 80 percent of the iron ore used in U.S. steel production • An asset that extends 2,300 miles into the North American hinterland • Home to 55 percent of North America’s manufacturing and service industries • Home to more than 50 percent of the Fortune 500 industrial companies • Considered the most environmentally friendly mode of transportation • A reliable transportation mode, having a 98 percent availability rating • Capacity available to meet the demands of global trade in the decades ahead The Great Lakes/St. Lawrence Seaway System A Vital Waterway—Past, Present and Future GREAT LAKES/SEAWAY REVIEW January-March, 2009 11 T H E S Y S T E M Polsteam USA Inc. 17 Battery Place, Suite 907 New York, NY 10004 Phone: 212 422 0182 E-mail: polsteamusa@polsteamusa.com Polska Zegluga Morska P O L S T E A M In Bulk Cargo Transportation since 1951 WWW.POLSTEAM.COM.PL GREAT LAKES/SEAWAY REVIEW January-March, 2009 13 R E T R O S P E C T I V E Our triumphs and failures Davis Helberg provides a retrospective on his 50 years working in the system It is drawn from a half-century of toiling in the vineyards, working in the trenches, climbing the hawsepipe and mixing metaphors in the Port of Duluth-Superior, and it is supported exclusively by memory and half-baked opinions. It was May of 1959 when a Greek captain stunned me by saying, “The Panama Canal was built 50 years before the Seaway, but the Seaway is 50 years behind the Panama Canal.” As an enthusiastic 18-year-old working for a Duluth-Superior vessel agency, I felt wounded. After all, the Seaway, which had just opened on April 25, was said to be the Eighth Wonder of the World. Some DAVIS HELBERG Retired Director Duluth Seaway Port Authority Fair warning is issued to historians, scholars, reporters, politicians, boatnerds (you really should get some help, you know) and general readers that this 50-year St. Lawrence Seaway retrospective is based on the perspective of someone who has observed the waterway’s triumphs and the failures solely from the far western shores of the Great Lakes. Davis Helberg started as a Great Lakes deckhand in 1958 before joining a Duluth-Superior vessel agency for the Seaway opening in 1959. He later worked as a newspaper writer, port public relations director, ship pilot manager, stevedore, terminal operator and, from 1979 to 2003, Duluth Port Director. For the past five years, he has written Great Lakes/Seaway Review’s interview series. Centerpointe Corporate Park • 500 Essjay Road • Williamsville, NY 14221• 716-635-0222• ascinfo@gatx.com• www.americansteamship.com 100 years of experience – positioned for the next century Performance Based Service Oriented Customer Focused American Steamship Company GREAT LAKES/SEAWAY REVIEW January-March, 2009 15 Canal’s 800-foot locks because: (1) the Welland had just undergone a major renovation 20 years earlier, (2) the cost of yet another Welland expansion was not deemed feasible and (3) only a small percentage of the world’s merchant fleet was bigger than 730-by-75 feet, the original limits for Seaway passage. What the engineers of the 1950s didn’t/couldn’t know was that by the 1970s, a new generation of bulk carriers would be built to “Panamax” (Panama maximum) dimensions. (And, it must be noted, the Panama Canal is now in the midst of a significant expansion.) Like the rest of the world, we also failed to anticipate the container revolution. R E T R O S P E C T I V E But, the fact is, the Seaway could not fulfill the grandiose predictions of its early promoters, some of whom exuberantly proclaimed Duluth-Superior would be the next Rotterdam. Had the Seaway been built in the 1920s—as it almost was—its impact might have matched the expectations because, by now, it probably would have been expanded into Panama dimensions (as was the Poe Lock at Sault Ste. Marie, Michigan, in 1968). In other words, my grumpy Greek captain had a point. The Panama Canal, opened in 1914, was built to accommodate 1,000-foot ships. Seaway planners, on the other hand, settled on matching the Welland folks were waiting for the trucks to roll in with the gold bricks that would pave our downtown. The gold bricks never made it. This is not to say, however, that the Seaway has been unsuccessful. It immediately and dramatically increased grain shipments out of the Port of Duluth-Superior, generated all manner of new cargoes (I especially recall an imported fish-based fertilizer that attracted stray cats from three counties), created hundreds of new jobs and triggered massive renovation and industrial development throughout the port. To this day, it provides regional shippers and receivers with an efficient, competitive trade route. General cargo operations at Duluth in the early days of the St. Lawrence Seaway. Canada Steamship Lines 759 Square Victoria Montreal, Quebec H2Y 2K3 T: (514) 982-3800 • F: (514) 982-3802 • ships@cslmtl.com • www.csl.ca For relief of headaches and pain due to congestion… …Use as directed. cargo GREAT LAKES/SEAWAY REVIEW January-March, 2009 17 R E T R O S P E C T I V E competitive in the upper Lakes grain trade. • Largely forgotten now, the frontburner issue in the early days was Seaway tolls. We spent years complaining about how Great Lakes trade was inhibited because ours was the first public waterway in North America requiring vessel and cargo tolls to repay all construction costs, plus interest, while also covering all operational expenses. A long political struggle finally bore fruit in the early 1970s when the interest was forgiven and in the early 1980s grain exports. With many ocean ships struggling to find inbound cargo, it seemed unlikely they could compete with the Canadians hauling iron ore into the lower Lakes and grain out of Thunder Bay and Duluth-Superior. But then came the European steel boom. By the end of the 1960s, steel imports to Toronto, Cleveland, Toledo, Detroit, Chicago and Milwaukee (and, in the 1970s, the new port of Burns Harbor, Indiana) had given ocean carriers the inbound payload they needed to stay General cargo, it was believed, would continue to be handled the way it had been since the invention of block and tackle: bags, boxes and crates hoisted aboard ship by dock or deck cranes. But then came Malcolm McLean and his great idea about pre-loading cargo into big metal boxes— containers—and moving them directly from origin by truck and/or rail to port and aboard ship. By the 1970s, containerization was here to stay. It wasn’t as if Great Lakes ports couldn’t (or can’t) handle containers. Most of our ports and terminal operators spent a lot of money—millions in some cases—erecting container cranes or preparing marshalling yards or underwriting new services. The net effect has been to prove, over and over, that shippers are not willing to alternate cargoes between the Lakes and East Coast rail service twice a year to accommodate our winter shutdown. Nonetheless, despite the hard realities of size and season—impossible to ignore— the Seaway has been an enormous asset to our ports and hinterlands. Its very existence has forced railroad and barge lines to stay competitive, and Duluth-Superior alone has exported some 200 million tons of grain. Grandchildren of the Seaway era’s first generation of waterfront workers are now employed in port facilities that didn’t exist 50 years ago. It’s hard to compress a half-century of commerce and politics into a small space, but following are selected observations from one greybeard’s vantage point: • When the Seaway opened, grain exports immediately vaulted the Port of Duluth-Superior into international prominence. World War II Liberty and Victory ships and even old T-2 tankers streamed into port along with other rust buckets and newer bulk carriers to load grain, most of it for Europe. But when new transshipment elevators opened in Quebec on the St. Lawrence River in the 1960s, some observers foresaw an end to the saltwater traffic. They said the many new Canadian lakers built expressly for the Seaway would capture nearly all of the (218) 727-8525 www.duluthport.com Where in the world… would we be without the St. Lawrence Seaway? The Seaway put our inland port on the map. Duluth-Superior is now the #1 port on the Great Lakes, and a thriving hub for global trade. the largest dry bulk port in the U.S. When the Seaway opened, grain exports immediately vaulted the Port of Duluth- Superior into international prominence. GREAT LAKES/SEAWAY REVIEW January-March, 2009 19 R E T R O S P E C T I V E government-assisted exports to be carried by U.S.-flag ships. Despite howls of protest and ardent lobbying by those of us directly affected, Congress passed the 1985 Farm Bill with an amendment increasing the U.S.-flag minimum on these cargoes to 75 percent. Nearly all P.L. 480 Great Lakes cargo was carried by foreign-flag vessels and, thus, thousands of regional jobs were at stake. We did negotiate a four-year reprieve known as the Great Lakes Set-Aside, but by 1990 the cargoes—and jobs—were gone. • The greatest frustration of the past 20 years has been the failure of the U.S. and Canadian governments to set national ballast water standards that would help combat the advance of invasive species. The political foot-dragging has prompted several states to establish inevitably incompatible regulations while ships—the most environmentally benign carriers of commerce—are getting an undeserved bad rap. While maritime industry critics are having a field day, shipowners’ hands are tied because they cannot invest big money on technology or equipment that may or may not be adequate once the feds finally act. • The most gratifying development of recent years has been the emergence of Seaway niche markets. Wind energy equipment has become (and you’ll pardon the term) a windfall for Duluth-Superior. So have heavy lifts; several of the longest, heaviest loads in North American railroad history have rolled from the Head of the Lakes to the tar sand oil operations of northern Alberta. And small, ultramodern ships have helped open markets for exporters of specialty grains and importers of forestry products. • A hidden bonus has been the Seaway’s contribution to regional tourism. Even after all these years, Great Lakes cities draw thousands of visitors who come to marvel at ocean vessels in the middle of North America. In a political context, it’s also a useful reminder to elected officials: Tourists come to see the ships; the ships don’t come to see the tourists. n Even after all these years, Great Lakes cities draw thousands of visitors who come to marvel at ocean vessels in the middle of North America. when the remaining construction cost was converted to equity. In 1986, the U.S. portion of tolls was rolled into Congressional appropriations and, although the Canadians continue to assess operating tolls, user fees have become so commonplace that the issue has slid down the priority list. • For some of us, the keenest disappointment was the 1985 Farm Bill. Starting in the late 1960s, Duluth-Superior and Lake Michigan ports handled ever-increasing volumes of bagged products via a federal program known as P.L. (for Public Law) 480. Commonly called Food for Peace, processed agricultural commodities are shipped to developing nations for humanitarian purposes. The U.S. Department of Agriculture runs the program for the State Department which in turn works with the U.S. Agency for International Development (AID) and various “relief agencies” to determine destinations. Shipments are monitored for compliance with a U.S. cargo-preference law that, until 1985, required at least 50 percent of these Despite the hard realities of size and season— impossible to ignore—the Seaway has been an enormous asset to our ports and hinterlands. Heavy lift cargo at Duluth. Project cargo for Tar Sands unloads at the Port of Duluth. 20 www.greatlakes-seawayreview.com T I M E L I N E z 1680 Dollier de Casson, Superior of the Sulpician Seminary in Montreal, begins building a 1.5 meter (5 foot) deep canal to bypass the Lachine Rapids between Lake St. Louis and Montreal; the canal was finally completed in 1824. z 1779 The Royal Army Engineers start work on four small canals on the north shore of the St. Lawrence at Montreal to connect Lake St. Louis to Lake St. Francis. z 1783 The four small canals on the north shore of the St. Lawrence are completed by the Royal Army Engineers. Only 0.76 m (2.5 feet) deep, they have a total of five locks, each 1.83 m (6 feet) wide — the first ever built on the St. Lawrence, and possibly in North America. z 1798 The first Great Lakes lighthouse is established at Chipwater Point, Lake Ontario. z 1824 The Casson Canal (now known as the Lachine Canal) links Montreal with Lake St. Louis. At the time it was 1.52 m (5 feet) deep and had seven locks. z 1829 On November 30, the schooner Ann and Jane completes the first transit of the first 27.5-mile Welland Canal. z 1833 The first Welland Canal is completed. Built by the Welland Canal Company, it is 43.5 km (27 miles) long, with 40 wooden locks. z 1843 New canal opens at Cornwall. z 1845 New canal opens at Beauharnois. z 1850 Alpheus Felch and Lewis Cass convince Congress that, for the good of the region, a canal is needed at Sault Ste. Marie between lakes Superior and Huron. With the help of historical documents by the Saint Lawrence Seaway Development Corporation and a boatnerd timeline assembled by Jody Aho, Great Lakes/Seaway Review has compiled the following timeline to serve as a reference for system users today and in the years to come. Enjoy walking through the centuries. GREAT LAKES/SEAWAY REVIEW January-March, 2009 21 Great Lakes/St. Lawrence Seaway TIMELINE A chronology of nearly 400 years of highlights Continued on page 23 region of North America, one of the key issues consistently raised by lawmakers, transportation planners, economists and policy officials on both sides of the border related to how best to fund the massive public project. After listening to compelling arguments from both sides as to whether the project should be federally funded through general tax receipts or operate as a self liquidating asset, the two nations agreed to adopt a toll-based financing mechanism for the waterway. The two federal corporations created to operate and maintain their respective nation’s Seaway locks and channels —the U.S. Saint Lawrence Seaway Development Corporation (SLSDC) and the Canadian St. Lawrence Seaway Authority (SLSA)—jointly established a tolls program in January 1959, with each nation collecting fees in its own currency. 22 www.greatlakes-seawayreview.com During its first 50 years of service, the St. Lawrence Seaway has successfully adapted to many changes affecting its operations and management. Some of these changes included new cargoes and trading partners, innovations in vessel design and operations, and advances in navigation technologies. Financing the Seaway’s operation over the first half century has been no different. Throughout the waterway’s history, the United States and Canada have made numerous changes to Seaway financing to ensure the solvency of the binational waterway, while maintaining its cost competitiveness in the global transportation arena. Even in recent years, both nations continue to reevaluate Seaway financing options and examine alternatives to meet today’s economic conditions. During decades of debate in the early 1900s on the merits and benefits of constructing the St. Lawrence Seaway to provide ocean shipping service to the Great Lakes KEVIN P. O’MALLEY Director, Office of Budget and Programs U.S. Saint Lawrence Seaway Development Corporation S Y S T E M F U N D I N G To this day, a work in progress Financing operations of the St. Lawrence Seaway Seaway Financing Milestone Dates January 29, 1959 The U.S. and Canadian Seaway agencies announce a Tariff of Tolls agreement, which included user charges to fund waterway operations, maintenance and construction debt. October 21, 1970 President Richard Nixon signs the Merchant Marine Act (P.L. 91-469), which includes an amendment to terminate the SLSDC’s accrued interest as well as future interest on its bonded debt totaling $22 million. April 1, 1977 The SLSA’s refinancing plan approved by the Canadian Parliament takes effect, which included forgiveness of the Authority’s outstanding debt interest and principal totaling over $840 million. December 18, 1982 President Ronald Reagan signs the U.S. Department of Transportation’s Fiscal Year 1983 Appropriations Act (P.L. 97-369), which included an amendment to cancel the SLSDC’s remaining $110 million construction debt. GREAT LAKES/SEAWAY REVIEW January-March, 2009 23 The original intent was for Seaway tolls to be assessed to users of the waterway at a rate sufficient for each nation to pay back its respective construction debt and interest in 50 years (amortized to be paid off in 2008) while also paying for annual operating costs. Construction of the St. Lawrence River section of the Seaway, including seven new locks (five Canadian and two U.S.), cost Canada $322 million and the United States $124 million, while Canada paid an additional $300 million to improve its 27-mile Welland Canal section of the waterway. The original Seaway tolls schedule was developed with the Canadian SLSA receiving 71 percent of toll revenues for usage of the St. Lawrence River section of the Seaway and 100 percent of toll revenues collected for transiting the Welland Canal. The remaining 29 percent of St. Lawrence River toll receipts were used by the U.S. SLSDC for its operations and debt. Based on the optimistic forecasts for significant growth in global trade via the Seaway projected prior to its opening, both nations were confident that the tolls-based funding mechanism would be successful in meeting their financial obligations, while still offering a cost competitive trade route. Facing changes. Following the opening of the Seaway in 1959, it soon became apparent that ocean going vessels were expanding rapidly in size. The Seaway, built to Welland Canal lock dimensions, was steadily being rendered into a niche market. By the mid-1960s, larger containerized ocean ships were becoming the norm for shippers using coastal ports, leaving the Seaway with only the world’s smaller bulk and general cargo fleets. Despite serving a niche market, Seaway tonnage continued to grow, reaching its zenith in the late 1970s. Strong grain shipments to the former Soviet Union coupled with robust movements of iron ore brought the Seaway to virtually full capacity, with annual movements of more than 70 million metric tons between 1977 and 1979. However, several events would soon wield a pronounced impact upon Seaway commerce. The shift of grain movements to the burgeoning Asian market via West Coast ports over the course of the next two decades cut grain traffic within the Seaway almost in half. The rise of “mini-mills,” which employ electric arc furnaces to melt scrap steel and thus do not require iron ore and coking coal, led to the general decline of the oncedominant steel mills in the Midwest and slashed the volume of iron ore moving via the Seaway. It became apparent after only a few short Throughout the waterway’s history, the United States and Canada have made numerous changes to Seaway financing to ensure the solvency of the binational waterway, while maintaining its cost competitiveness in the global transportation arena. SOURCE: BOGNER PHOTOGRAPHY LTD z 1855 The first lock is built at Sault Ste. Marie by the State of Michigan. z 1871 The U.S. Supreme Court declares that all upper Lakes, including Lake Erie, are seas— commercially and legally. z 1873 A second construction phase of the Welland Canal begins. z 1895 The first joint U.S.-Canadian Deep Waterways Commission is formed to study the feasibility of a Seaway. It is followed by an International Joint Commission in 1909, but the Seaway remains a dream. z 1908 First self-unloading carrier is launched. z 1909 Boundary Waters Treaty is signed by the U.S. and Canada, stating that all boundary waters “shall forever continue to be free and open for the purposes of commerce.” z 1913 Third construction phase begins on the Welland Canal. z 1914 Davis Lock is built at Sault Ste. Marie, Michigan. z 1919 Sabin Lock at Sault Ste. Marie opens to shipping. z 1920-21 International Joint Commission studies on the St. Lawrence River are followed by hearings before Congress on the benefits of the Seaway. z 1921 International Joint Commission recommends a bi-national treaty for the St. Lawrence River between Montreal and Lake Ontario. z 1928 43 self-unloading vessels operate on the Great Lakes. z 1932 New Welland Canal is completed for C$249 million. This was the first step in the completion of the modern Seaway. Canada and the U.S. sign the Great Lakes-St. Lawrence Deep Waterway Treaty. Continued on page 25 Continued from page 21 April 1, 1987 As required by the Water Resources Development Act of 1986 (P.L. 99-662), funding for the U.S. SLSDC is changed from usage of commercial toll receipts to annual federal appropriations from the newly-created Harbor Maintenance Trust Fund. U.S. Seaway tolls are eliminated. June 25, 1997 The SLSDC and SLSA agreed to amend the Seaway Tariff of Tolls, effective August 1, 1997. It marked the last time the two Seaway entities negotiated Seaway tolls levels. 24 www.greatlakes-seawayreview.com years of operation that lower-than-expected tonnage levels, and thus toll revenues, were simply not going to be sufficient to meet the objectives of the original Seaway financing agreements. In fact, both the SLSDC and SLSA were projecting operating deficits and were already significantly behind schedule in meeting their long-term financial goals. The most obvious options to resolve the debt situation were either unrealistic or problematic—increase tonnage levels quickly and dramatically or increase toll levels significantly. An alternative solution was federal intervention, which took place in both nations during the 1970s and early 1980s. Debt forgiveness. The U.S. Congress took the first step, as part of the Merchant Marine Act of 1970, by terminating the SLSDC’s accrued and future interest on its bonded debt totaling $22 million. The intent of the legislation was to put the SLSDC back on track to meet its 50-year target to repay the $133.5 million incurred for U.S. Seaway construction and subsequent lock rehabilitation costs. Unfortunately, significant reductions in Seaway trade in the early 1980s caused Congress to intervene once again, this time in 1983, to cancel the SLSDC’s remaining $110 million debt balance. In total, the SLSDC had returned to the U.S. Treasury more than $64 million in interest and debt payments. Similarly, Canada’s outstanding Seaway debt was growing at an alarming rate in the mid-1970s, caused by lower than expected toll receipts, higher than expected operating and maintenance costs and rising interest rates. In 1976 alone, the SLSA lost more than $50 million in its operations of the Seaway. Recognizing the growing debt problem, the Canadian Parliament took legislative action and approved a refinancing plan for the SLSA, effective April 1, 1977, that included forgiveness of the Authority’s debt interest and principal totaling more than $840 million. With the start of the 1980s, Seaway tonnage continued to pull back from the alltime highs recorded in the mid and late 1970s. The U.S. Congress stepped in once again; this time in an attempt to reverse the reduction in Seaway commerce by im- S Y S T E M F U N D I N G *Transfer to The St. Lawrence Seaway Management Corporation took place on October 1, 1998, while dissolution of the Seaway Authority was effective December 1, 1998. It became apparent after only a few short years of operation that lower-thanexpected tonnage levels, and thus toll revenues, were simply not going to be sufficient to meet the objectives of the original Seaway financing agreements. PRESIDENTS OF THE St. Lawrence Seaway Authority/Management Corporation The Hon. Lionel Chevrier July 1, 1954 – June 1, 1957 Charles Gavsie June 1, 1957 – Feb. 1, 1958 B. J. Roberts Feb. 2, 1958 – Aug. 1, 1960 Robert James Rankin Aug. 1, 1960 – July 31, 1965 Pierre Camu Aug. 1, 1965 – Oct. 25, 1973 Paul D. Normandeau Oct. 25, 1973 – Jan. 18, 1980 William A. O’Neil July 3, 1980 – Jan. 3, 1990 Glendon R. Stewart Jan. 9, 1990 – Aug. 7, 1997 Michel Fournier Aug. 7, 1997 – Dec. 1, 1998* Guy Véronneau Oct. 1, 1998 – Mar. 31, 2003 Richard Corfe April 1, 2003 – Present ADMINISTRATORS OF THE Saint Lawrence Seaway Development Corporation Lewis G. Castle July 2, 1954 – June 4, 1960 (died in office) M. W. Oettershagen Mar. 29, 1961 – Dec. 30, 1961 Joseph H. McCann Jan. 1, 1962 – April 4, 1969 David W. Oberlin Aug. 11, 1969 – Feb. 27, 1983 James L. Emery Nov. 21, 1983 – Nov. 21, 1990 Stanford E. Parris Mar. 21, 1991 – April 15, 1995 Gail C. McDonald Jan. 2, 1996 – April 11, 1997 Albert S. Jacquez Jan. 4, 1999 – July 1, 2006 Collister “Terry” Johnson, Jr. Oct. 6, 2006 – current GREAT LAKES/SEAWAY REVIEW January-March, 2009 25 proving the waterway’s cost competitiveness. With the passage of the Water Resources Development Act (WRDA) of 1986, the SLSDC was reauthorized as an appropriated agency of the U.S. government, receiving its funding through the national Harbor Maintenance Trust Fund (HMTF). This legislation removed the U.S. portion of Seaway tolls, which was approximately 15 percent of the total Seaway toll charges by that time. Today, the original concept to fund the SLSDC through user fees continues, albeit in an altered manner from toll-based financing. The SLSDC receives an annual allotment from the HMTF, made up of Harbor Maintenance Tax receipts. The national tax on foreign waterborne trade was also created as part of WRDA 1986. Currently, the tax is levied as a 0.125 percent ad valorem fee on the value of U.S. imports unloaded from a commercial vessel using federally-maintained harbors nationwide. In addition to funding U.S. Seaway operations and maintenance, the tax receipts in the HMTF are used principally to fund port and dredging projects performed by the U.S. Army Corps of Engineers. With the remarkable growth in high-value U.S. imports over the past decade, mostly originating in Asia, the HMTF currently has an asset surplus of more than $4.5 billion. The Canadian Seaway entity, reorganized by its government in 1998 as a private, not-for-profit entity and renamed the St. Lawrence Seaway Management Corporation (SLSMC), continues to charge Seaway tolls to fund its operations and maintenance activities. The SLSMC has been successful in managing tolls at levels that not only maintain current customers but also attract new users. In addition, toll incentives have been introduced in recent years that have been instrumental in Long Sault Canal construction, May 16, 1957. z 1936 65 self-unloading vessels operate on the Great Lakes, 54 U.S. and 10 Canadian. z 1943 MacArthur Lock is completed at Sault Ste. Marie for $12.7 million. z 1949 Public interest in a deeper waterway on the St. Lawrence River and increased trade lead to a joint Canadian-U.S. Deep Waterways Commission to again study the feasibility of what will become the St. Lawrence Seaway after two World Wars and other factors causing delays. z 1951 The St. Lawrence Seaway Authority Act and the International Rapids Power Development Act allow Canadians to begin navigation works on the Canadian side of the river from Montreal to Lake Ontario, as well as in the Welland Canal. At the same time, a joint U.S.- Canadian project begins power works in the International Rapids section of the St. Lawrence. The U.S. also begins work on the Wiley-Dondero Canal that will bypass the International Rapids. Cooperation and consultation on the elements of the modern Seaway commences. z 1952 A University of Minnesota geologist discovers a technical process for pelletization of hard rock taconite. z 1954 The St. Lawrence Seaway Authority (SLSA) is established by an Act of Parliament, with the mandate to acquire lands for, construct, operate and maintain a deep draft waterway between the port of Montreal and Lake Erie, along with the international bridges that cross it and other lands and structures. The U.S. Saint Lawrence Seaway Development Corporation (SLSDC) is created by law. The U.S. joins Canada in developing the St. Lawrence Seaway with passage of the Wiley-Dondero Act (Seaway Act) on May 13. An agreement is reached between the U.S. and Canada on Seaway construction for $470.3 million, of which Canada pays $336.5 million and the U.S. pays $133.8 million. Continued from page 23 Continued on page 27 26 www.greatlakes-seawayreview.com at more than $350 billion. As both nations prepare to celebrate the 50th anniversary of this important and vital transportation route, their governments have recognized the need to ensure the waterway’s continued role as a key waterborne component of the overall North American transportation system. The world’s largest binational trading relationship—more than $1.6 billion in goods and services cross the U.S.- Canadian border daily—will require a competitive and reliable option for the next attracting new cargoes, including high value general cargoes related to the Alberta tar sands project, commercial gas and oil pipe, and dozens of shiploads of windmill parts in the fast-growing wind energy sector. The Canadian Government still retains ownership of the lock infrastructure and funds necessary capital improvements to these assets. Improving infrastructure. Over the past 50 years, the Seaway has moved more than 2.5 billion metric tons of cargo valued 50 years. With that overarching goal in mind over the past several years, both governments have made significant progress in addressing improvements and upgrades to the Seaway’s aging infrastructure. Following its reorganization in 1998, the SLSMC began an aggressive infrastructure renewal program to make critical improvements at its 13 Seaway locks, including the eight Welland Canal locks that have been in operation since 1932. In addition, the U.S. SLSDC’s fiscal year 2009 budget request to the U.S. Congress included the agency’s first-ever large-scale asset renewal plan to address its infrastructure needs, following the lead of its Canadian partner. The SLSDC’s Asset Renewal Program (ARP) was developed based on many of the engineering findings made in the November 2007 binational Great Lakes St. Lawrence Seaway Study, led by the U.S. Army Corps of Engineers, Transport Canada and the U.S. Department of Transportation. In addition, the ARP addresses lock improvements either underway or completed on the Canadian side of the Seaway to ensure a seamless and integrated lock system. The SLSDC’s ARP includes 50 projects to be completed over a 10-year period at an estimated cost of $165 million. As the St. Lawrence Seaway enters a new era, its only certainty is change. Flexibility on the part of all waterway stakeholders, including ports, carriers, labor, pilots, lawmakers and the Seaway Corporations, will be critical to adapting to operational, logistical, commercial, political and financial challenges that are certain to arise in the waterway’s second half century. In economically turbulent times, the Seaway offers an anchor of stability. The significant investments underway today promise reliable and efficient delivery of 21st Century goods in an economically sustainable fashion for future generations. n Former SLSDC Chief Financial Officer Edward Margosian, SLSMC Chief Financial Officer Serge Bergeron, SLSDC International Trade Specialist Tim Downey and SLSMC Communications and Public Relations Officer Andrew Bogora contributed to this article. S Y S T E M F U N D I N G Following its reorganization in 1998, the SLSMC began an aggressive infrastructure renewal program to make critical improvements at its 13 Seaway locks, including the eight Welland Canal locks that have been in operation since 1932. GREAT LAKES/SEAWAY REVIEW January-March, 2009 27 Even the most enthusiastic boosters of the St. Lawrence Seaway are willing to admit that its full potential has yet to be achieved and while many improvements have been proposed, few have been backed by quantitative studies providing dollars-and-cents answers. How much benefit, in dollars, would come from an extension of the operating season? From larger locks? From deeper channels? From a container cargo feeder service? These are serious questions that merit serious consideration both as to costs and to benefits, on a macro-scale. In the case of ships engaged in moving bulk commodities through the Seaway, year-round navigation would allow savings of up to 12.5 percent in required freight rates. Even larger savings could be effected by moderate deepening of the system and a major enlargement of the locks. For example, a 1,200- by 150- foot bulk carrier with 28-foot draft could effect savings of 38.5 percent over ships of the current maximum size (730 feet x 75 feet x 25.75 feet). The Seaway has not attracted its share of the important and lucrative commerce in manufactured goods moving between Europe and the Midwest. Our projections show that a well-designed Seaway feeder service could offer unitized cargo freight rates between 25 and 50 percent lower than those currently charged by the railroads. If the shipping season were extended to 350 days per year, the rail rates could be beaten by 40 to 65 percent. The most attractive vessel for the Seaway feeder service would appear to be a LASH type ship carrying 20-foot containers in standard lighters. Although a tugbarge container could offer slightly lower required freight rates, it would be at the cost of discouragingly long delivery times. Important economic gains would result from any changes leading to quicker turnaround times for ships using the Seaway. Fewer delays, faster locking procedures and shorter times in port are all worthwhile objectives. In the case of unitized cargo, if current port times could be halved, required freight rates would be reduced by 22 percent. (The ports of Duluth, Chicago and

Maritime Editorial