Vol.39 No.4 APR‑JUN 2011

V O L U M E 3 9 A P R I L – J U N E 2 0 1 1 N U M B E R 4 G LGREAT LAKER Funding the system’s future . 2010 season review . Investing in sustainable shipping . Offshore turbines Interlake Steamship The Interlake Steamship Company Interlake Corporate Center 4199 Kinross Lake Parkway Richfield, Ohio 44286 Telephone: (330) 659-1400 FAX: (330) 659-1445 ISO Certified E-mail: sales@interlake-steamship.com Precious Cargo? WE CAN HANDLE IT! At Interlake Steamship we treat each and every shipment as if it were priceless. Whether it’s coal, grain, taconite pellets or limestone we know how important that cargo is to our customers… and to their customers. And, we know how important it is that it be delivered in a timely manner with the utmost care. With self-unloading vessel capacities ranging from 17,000 to 68,000 tons, you can trust Interlake Steamship with all your dry bulk cargo needs on the Great Lakes. Call Interlake Steamship – where all cargo is precious cargo. www.greatlakes-seawayreview.com Great Lakes/Seaway Review 221 Water Street, Boyne City, Michigan 49712 USA (800) 491-1760 FAX: (866) 906-3392 harbor@harborhouse.com The international transportation magazine of Midcontinent North America G L A R T I C L E S A P R I L – J U N E 2 0 1 1 Dateline: Great Lakes/St. Lawrence Seaway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Administrator’s Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Regional Shipyard Activity Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Naval Architecture & Engineering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Infrastructure FUNDING THE SYSTEM’S FUTURE . . . . . . . . . . . . . . . . . . . . . . . . . . 6 New mindsets, realities create avenues to increase public-private partnerships in funding infrastructures improvements. Port Development MUTUAL BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Cargo capacity feeds land planning and distribution. The 2010 Season ON THE MEND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2010 season shows overall increases, but still below averages. Fleets THE NEW EQUINOX CLASS VESSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Investing in sustainable shipping on the Great Lakes. Commodities OFFSHORE TURBINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Units not likely to pop up in the Lakes any time soon. The Environment PREVENTING AN INVASIVE SPECIES . . . . . . . . . . . . . . . . . . . 49 Bi-national risk assessment examines Asian carp. Interview FEDERAL INTERVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Asian carp director focuses federal effort to keep Asian carp out of the Great Lakes. Dredging A SENSE OF URGENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Lack of funding prolongs crisis on the Great Lakes. Marine Photography INDIANA’S LIGHTHOUSES . . . . . . . . . . . . . . . . . . . . . . . . . 64 Getting a rare waterborne view of the collection. Fleets NEW NAMES FOR FORMER UPPER LAKES BOATS . . . . . . . . . . . . . . . . . . . . 67 Algoma Central adds its flair. Meet the Fleet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Meet the Crew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 On the Radar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Laker Library Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 GREAT LAKER D E P A R T M E N T S GREAT LAKES/SEAWAY REVIEW April-June, 2011 1 Public-private partnerships considered to fund infrastructure improvements. Page 6. 2010 season shows increases, but still below historic averages. Page 22. A waterborne view of Indiana’s lighthouses. Page 64. Gateway Trade Center Port of Buffalo Port City Tug Port City Marine Services Port City Steamship Services 2 www.greatlakes-seawayreview.com 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 Felton Business Manager Amanda Korthase Circulation Manager ADVERTISING DEPARTMENT Kathy Booth Account Manager Rex Cassidy Account Manager James Fish Director of Sales Jennifer Martin Account Manager John H. Nikolai Account Manager Patricia A. Rumpler Account Manager William W. Wellman Senior Account Manager EDITORIAL ADVISORY BOARD John D. Baker, President, Great Lakes District Council, International Longshoremen’s Association; Bruce Bowie, President, Canadian Shipowners Association; Joe Cappel, Director of Cargo Development, Toledo-Lucas County Port Authority; Steven A. Fisher, Executive Director, American Great Lakes Ports Association; Anthony G. Ianello, Executive Director, Illinois International Port District; Ray Johnston, President, Chamber of Marine Commerce; Peter Kakela, Ph.D., Professor, Department of Community, Agriculture, Recreation and Resource Studies, Michigan State University; Mark Pathy, Executive Vice-President, Fednav Limited; Daniel L. Smith, Former National Executive Vice President, American Maritime Officers; John Vickerman, Founding Principal, Vickerman & Associates, LLC; James H.I. Weakley, President, Lake Carriers’ Association; Greg Wight, President & CEO, Algoma Central Corporation. SUBSCRIPTIONS – (800) 491-1760 or www.greatlakes-seawayreview.com www.greatlaker.com Published quarterly. One year $32.00; two years $53.00; three years $75.00. Foreign: One year $47.00; two years $68.00; three years $100.00. One year digital edition $20. Payable in U.S. funds. Back issues available for $7.50. Article reprints are also available. Reprints and scans 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. © 2011 Harbor House Publishers, Inc., Boyne City, Michigan. All rights reserved. No article or portion of same may be reproduced without written permission of publisher. Great Lakes/Seaway Review Cover: Midstream transfer at the Bay of Sept-Iles. Photo courtesy Port of Sept-Iles. Great Laker Cover: Michigan City, Indiana Lighthouse. Photo by Gary Martin. 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 39 APRIL-JUNE, 2011 NUMBER 4 Port City Tug Port City Marine Services Port City Steamship Services TUG AND BARGE OPERATORS VESSEL MANAGEMENT 560 Mart Street Muskegon, MI 49440 231.722.6691 office 231.726.6636 fax PORT OF Strategic transportation network and location Complete deep water port facilities 2544 Clinton St. P.O. Box 880 Buffalo, NY 14224 716-826-2890 716-826-1342 FAX info@portofbuffalo.com www.portofbuffalo.com Gateway Trade Center, Inc. Subsidiary of New Enterprise Stone & Lime Co., Inc. BUFFALO G R E A T L A K E S / S T . L A W R E N C E S E A W A Y GREAT LAKES/SEAWAY REVIEW April-June, 2011 3 DATELINE Essar Steel Algoma selects new CEO Essar Steel Algoma Inc. named James Hrusovsky as Chief Executive Officer, subject to regulatory approval. Hrusovsky, 54, has held a number of senior executive positions in the steel industry, most recently as Chief Executive Officer for Severstal Columbus. “We are very pleased to attract an individual with Mr. Hrusovsky’s skills to serve as the company’s CEO,” said Malay Mukherjee, CEO Essar Steel Business Group. “Mr. Hrusovsky is one of the leading executives in the steel industry with over 29 years of experience in nearly all aspects of steel making including research, quality, product development, engineering, capital projects, sales and profit center management.” . Thomas Burke passes Former Duluth Seaway Port Authority Executive Director, Thomas Burke, passed in Tampa, Florida May 24. He served with the port authority from 1969 to 1977. When first appointed, he became the youngest director of a major port in the nation at 38. Burke is a native of Albany, New York. Through strong political connections, he was able to get the U.S. Army Corps of Engineers to lift a Cold War ban on vessels from the Soviet Union entering the St. Marys River, which made it possible for millions of tons of grain to travel through the Twin Ports to new markets. After leaving Duluth, Burke served as Executive Director of the Cleveland and Port Everglades port authorities, worked for the U.S. Department of Agriculture, Food for Peace Program, as foreign diplomat under five U.S. presidents and as senior adviser for K Line America Inc. . Great Lakes short sea shipping gets a boost in business McKeil Marine Ltd. and Hunt’s Transport Ltd. have more than doubled the capacity of their short sea shipping service from the Port of Hamilton to Newfoundland. Hunt’s Transport leased the barge service, which is managed by Hamilton-based McKeil Marine, to transport cargo for its customers during the summer of 2010 after running into delays and capacity problems with a ferry service to Newfoundland. Last year, during the trial season, the barge service made four successful trips through the Seaway to Argentia, Newfoundland. This year, nine trips will be made. “Much of the cargo is heading for mining and offshore projects,” said Greer Hunt, President of Hunt’s Transport. “Atlantic Canada is having a bit of a boom and we’re looking at ways to take advantage of that.” Steve Fletcher, President of McKeil Marine, said: “If the demand grows, we will look into the feasibility of expanding the service. For now, we will continue to offer a sound innovative solution to our customer.” The capacity and fuel efficiency of barge transport provided significant environmental benefits. “We can get 50 trailers onto a barge. Instead of 50 trucks burning fuel and releasing emissions into the atmosphere, we’ve got one barge with a much smaller carbon footprint,” Hunt said. McKeil Marine and Hunt’s Transport have also formed a joint company to explore other areas of business opportunity. This could involve services to more remote areas of Newfoundland and Labrador to deliver supplies and materials to specific industrial or construction projects. According to Bruce Hodgson, Market Development Director for The St. Lawrence Seaway Management Corporation, the Hunt- McKeil barge service was a good example of how short sea shipping can be expanded in the Great Lakes/Seaway system. . Algoma Central Corporation has completed the acquisition of Upper Lakes Group Inc. (ULG) partnership interest in Seaway Marine Transport (SMT) and related entities, along with the vessels and assets owned by ULG and its affiliates and used in the Great Lakes/St. Lawrence Seaway dry-bulk freight business. Under the terms of the transaction, Algoma has acquired 11 vessels outright and has acquired ULG’s interest in four jointly-owned vessels. In addition, Algoma acquired ULG’s interest in a fifth vessel that is currently under construction in China. This vessel, which is expected to arrive in Canada in July, 2011, will be named Algoma Mariner. “This is an historic day for Algoma Central Corporation,” said Greg Wight, President and CEO of Algoma. “With this acquisition we will enhance our focus on our domestic dry-bulk marine transportation segment and the very important task of fleet renewal based on the recently announced acquisition of new Equinox Class vessels. We welcome the shipboard personnel of the vessels acquired from Upper Lakes and the SMT personnel to Algoma as we look to the future with great excitement.” . Canadian-U.S. shipowners meet in Traverse City During the 75th International Joint Conference in June, members and guests of the Lake Carriers’ Association and Canadian Shipowners Association met to discuss shipping issues, tour the State of Michigan training vessel at Great Lakes Maritime Academy and conduct meetings. In addition to carriers, the event drew members of government, U.S. Army Corps of Engineers and the U.S. and Canadian Coast Guards. To view the conference presentations, go to www.shipowners.ca and see the Documents page for the International Joint Conference June 2011 tab. . Thomas Burke James Hrusovsky Algoma completes acquisition of Upper Lakes Group interests in Seaway Marine Transport Oberstar christened in Duluth The former Charles M. Beeghly was rechristened as the Hon. James L. Oberstar in late May by the Interlake Steamship Company in Duluth, Minnesota. The vessel was officially re-named prior to the start of the 2011 shipping season. The Oberstar is named in honor of Congressman Oberstar who served as Chairman of the House Transportation and Infrastructure Committee and had a reputation as Congress’ primary expert on transportation issues. The Oberstar is 806 feet long, with a beam of 75 feet and a carrying capacity of 27,500 net tons. She transports dry bulk cargoes of taconite and coal for various customers throughout the Great Lakes region. Polsteam D A T E L I N E 4 www.greatlakes-seawayreview.com from Port-Cartier to Hamilton,” said Eric Tetrault, Head of Communications and Public Affairs for ArcelorMittal. Construction of the expansion is beginning, with iron ore concentrate output increasing over the next three years until reaching 24 million metric tons. “ArcelorMittal Mines Canada is a flagship mining asset for the group, which offers considerable opportunity for expansion,” said Peter Kukielski, Member of the Group Management Board and Head of Mining for ArcelorMittal. “We have already announced our intention to grow our iron ore production to 100 million metric tons by 2015 and this expansion forms an important part of that.” This project is subject to environmental and other regulatory approvals. . Fleet revitalization study moves forward The U.S.-Flag Great Lakes Fleet Revitalization Study, which is identifying options for supporting the maritime industry in revitalizing the U.S.-flag fleet, is nearing Phase 2 in preparation for a projected completion date of September 30. During Phase 1, the U.S. Maritime Administration (MARAD) gathered 125 industry stakeholders—representing carriers, shippers, port authorities, labor, NGOs, economic development corporations, local governments and trade associations—at three public outreach meetings. “Participants were passionate about the Great Lakes fleet and ports and they provided information that is vital to the study,” said David Matsuda, MARAD Administrator, noting that since those meetings, the study team has continued to gather information and discuss the outcome of the outreaches by meeting with: • Lake Carriers’ Association and the carriers it represents. • Great Lakes ports regarding their needs and the current maritime transportation market. • Major shippers, such as Great Lakes steel producers to hear about their transportation needs and how their industry depends on the U.S.-flag fleet. • Other agencies involved in Great Lakes shipping, such as the U.S. Army Corps of Engineers, U.S. Coast Guard, U.S. Environmental Protection Agency, Federal Highways Administration, Federal Railroad Administration and the Saint Lawrence Seaway Development Corporation. Phase 2 involves analyzing the information and comments gathered. A report will be compiled by ABS Consulting, which is under contract for $834,000 to lead the effort. . ArcelorMittal launches C$2.1 billion dollar investment in mining ArcelorMittal is expanding its Mont-Wright mining complex with additional construction at Port-Cartier. The investment will allow ArcelorMittal Mines Canada (AAMC) to increase annual production of iron ore concentrate from 14 million to 24 million metric tons by 2013. AMMC is also evaluating increasing its production of iron ore pellets from 9.2 to 18.5 million metric tons. The scheme represents a total investment of C$2.1 billion that will create 8,000 jobs during construction and more than 900 permanent jobs once completed. AAMC is a major provider of iron ore to the Dofasco operation at the Port of Hamilton. Currently, the port receives about 40 percent of AAMC’s iron ore, with that percentage remaining the same as output increases. “We will see about four more million [metric] tons of iron ore move down the Seaway Duluth Seaway Port Authority REGIONAL CALENDAR REGIONAL CALENDAR D A T E L I N E GREAT LAKES/SEAWAY REVIEW April-June, 2011 5 New ballast report releases A study by the National Research Council of the National Academies, called Assessing the Relationship Between Propagule Pressure and Invasion Risk in Ballast Water was released in June. The report produced from the study focuses on inoculums density, the basis for proposed discharge standards. The study was launched at the request of the U.S. Environmental Protection Agency and the U.S. Coast Guard, which are developing national standards limiting the density of organisms in ballast water discharge to U.S. waters. The goal of the report is to inform the regulation of ballast water by helping the federal agencies better understand the relationship between the concentration of living organisms in ballast water discharges and the probability of nonindigenous organisms successfully establishing populations in U.S. waters. The following recommendations are included in the 137-page report: • Basing ballast water discharge standards on models explicitly expressed in an adaptive framework to allow the models to be updated in the future with new information. • Using mechanistic single-species models for the short-term to examine risk-release relationships for best case (for invasion) scenario species. • Developing a robust statistical model of the risk-release relationship. • Acknowledging that models of any kind are only as informative as their input data. • Using two-track approach to obtain both experimental and field-based data. The National Research Council is the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public and the scientific and engineering communities. To review the complete report, go to http:// www.nap.edu/catalog.php?record_id=13184.. SEPTEMBER 20-21 Great Lakes Wind Collaborative 4th Annual Meeting, Detroit, Michigan John Hummer, jhummer@glc.org www.glc.org/events/ 20-21 2011 Ohio Conference on Freight Hilton Hotel Toledo and Dana Conference Center, Toledo, Ohio tmacog.org/OCF_11/OCF_home_11.htm 22-23 GLMRI, Fall Meeting, Duluth, Minnesota www.glmri.org/news/ JUNE 15-16 TRANSLOG 2011 Hamilton Convention Centre Hamilton, Ontario http://mitl.mcmaster.ca/translog/index.html 15-17 Great Lakes and St. Lawrence Cities Initiative, Annual Member Meeting & Conference, Niagara Falls, Ontario www.glslcities.org JULY 10-12 Transportation Research Board 2011 Joint Summer Meeting Seaport Hotel, (617) 385-4000 Boston, Massachusetts, www.trb.org 17-21 Coastal Zone 2011 Chicago Hyatt Regency (301) 563-7202, Chicago, Illinois ww.doi.gov/initiatives/CZ11/index.htm NOVEMBER 8-9 Hwy H2O Conference 2011 Toronto Marriott Airport Hotel Toronto, Ontario www.hwyh2o.com/conferences 16-18 SNAME 2011 Annual Meeting & Expo Hyatt Regency Houston Houston, Texas Alana Anderson, (201) 499-5066 www.sname.org PORT of DULUTH-SUPERIOR CARGO CAPITAL GreatLakes We carry a little extra weight. No job is too big, no detail too small when it comes to handling dimensional cargo here at the Head of the Lakes. That’s why logistics experts rank Duluth among the top 10 wind cargo ports in North America. We’ve moved nearly one million freight tons of wind turbine components since 2005 – transferring tower sections, blades, nacelles and hubs between ships, truck and specialized rail cars with ease. High, wide, heavy cargo. What’s a little extra weight? Size doesn’t matter. Service does. 218.727.8525 www.duluthport.com 6 www.greatlakes-seawayreview.com I N F R A S T R U C T U R E FUNDING the system’s FUTURE New mindsets, realities create avenues to increase public-private partnerships in funding infrastructure improvements SOURCE: ROGER LELIEVRE The downbound Edward L. Ryerson eases into lock at Sault Ste. Marie, Michigan. The Seaway was constructed at a cost of $638 million in the 1950s, a massive undertaking by both the Canadian and U.S. governments. To understand the magnitude of the project, if built today, Seaway construction would cost $4.9 billion. This is roughly equivalent to the cost of the massive Panama Canal widening project underway. The current canal widening involves about the same amount of excavation as the original construction completed in 1914. GREAT LAKES/SEAWAY REVIEW April-June, 2011 7 These projects are massively distinct from each other, with the canal joining two oceans and the Seaway connecting the St. Lawrence River and the Great Lakes to form an inland navigation system connecting what have historically functioned as some of the most powerful industrial centers in the world. Though the Seaway followed the canal by some 44 years, both projects were built in different eras from today. Both were marvels of engineering sophistication. Both were designed to accommodate smaller vessels than are commonly used today. One is undergoing an extraordinary metamorphosis and the other is relatively static in its design, dimension and market. No other connection between the two projects is implied, but it is important to draw a broad parallel of these groundbreaking, engineering feats supporting access to North America. They were also tests of the business judgment of government: commerce could flow more efficiently to constituent regions. But for the risk taken by those governments to construct what were seen as huge and politically-risky endeavors, these projects would not have occurred in their day and may not occur if judged amid today’s thinking. The canal is being widened in hopes of transforming it to play a far more important role in international commerce. The Panama Canal Authority (PCA) is thinking big and many doubt the underlying business model. The PCA sees its product as the most diverse port organization in the world, with ports on two oceans and is seeking to capitalize on a larger role by developing the canal to be a globallysignificant center for economic development. Time will tell how successful the plans will be, but both mindsets parallel the way we think about the Seaway. Envisioned for several centuries and then developed as an integrated transportation system in the 1950s, will the Seaway and its component parts be seen by governments, industrial businesses, shippers and risk capital investors as a generator of business opportunity for a new generation? The decisions by both the U.S. and Canadian governments to construct the Seaway were historic and anticipated substantial longterm financial and civic return. They were successful decisions in most regards, but the future will require far more integrated thinking in terms of market development and maritime, road and rail infrastructure investments. Underlying assumptions. There are several important underlying assumptions as they pertain to the Seaway’s future: 1) Historic lack of general investment – It is relatively accepted that, in general, governments haven’t invested in infrastructure as they should have. To some extent, our national competitiveness is in jeopardy due to the cumulative disinterest in investing in the future. Few doubt there is jeopardy to our competitiveness over the long-term if we don’t rectify this mindset. The pattern of government investment during “normal economic times,” when we could afford it, simply wasn’t robust enough. Depending on the infrastructure system, we now own 30- to 100-year-old road, bridge, levy, lock, etc. systems of generally decaying infrastructure with modest means to maintain them. These systems were once the most modern in the world. In the meantime, countries we consider the system’s competition have been aggressively investing in In the article in the last edition of Great Lakes/Seaway Review entitled “Global Logistics Evolution and Opportunities for the St. Lawrence Seaway,” we describe the Great Lakes/St. Lawrence Seaway system as an extremely important economic engine for 52 years. The Seaway continues to be a vital economic asset for the two-country region. In this article, part two, we discuss the issue of infrastructure investment and its impact on the future success of the widely defined Seaway system. In particular, we will review the issues associated with creating the next generation of infrastructure through new investment in ports, roads, rail and property. ADAM WASSERMAN Partner Global Logistics Development Partners PortCentric Logistics Partners If built today, Seaway construction would cost $4.9 billion. I N F R A S T R U C T U R E Adonis Bring your ships and shore together in one integrated system A Complete Maritime Human Resource System: For more information, visit our website: www.adonis.no Tailor- made for the Great Lakes Check printing Full US Payrol Documents sca Crew Manage Complet .. Direct Deposit interfa ll with built-in tax and so scanning .. Mail Merge .. W gement .. Crew Planning .. e aces .. Accounting System i ocial security .. All AMO, S Web Recruitment Portal Course Planning .. Comp System m interfaces .. E-mail inte , SIU and USW calculation etence Matrix and Requi : erface .. ns and reporting irements .. i Automatic shi p g nformation, p-shore replication of cr ep a ew and payroll informati g Sy on business within its current envelope for the foreseeable future. 6) Infrastructure investment leads to economic development – Economists remark that investments in high-productivity infrastructure create lower costs for businesses, stimulate innovation in manufacturing and create jobs. And by improving roads and highways, these investments could cause billions in savings for industry in fuel costs, lost time and inventory controls. The bottom- line is that our manufacturing future is linked to our ability to get products in and out to growing and important foreign markets. The Seaway serves the traditional manufacturing centers of our continent— so with rising fuel costs and other dynamic factors at play, any legitimate cost and transportation advantage is likely to be a major asset in connecting our businesses to their growth markets. Imagine success. Fundamentally, there are a series of issues that have prevented the Seaway from growing its business over the past decades. Its potential is interconnected to a complex set of global and continental logistics, supply chain and geo-political issues. Surely, the state of transportcompetition and the overlaid economic condition of the Seaway’s economic region are extraordinary factors in this equation. In most parts of the world, an inland waterway system such as the Seaway would be seen as a more significant asset for commerce and economic development than is generally the case in North America. We are so decentralized in our market analytics, planning, strategy and delivery that it’s hard to gain traction on large, transformative projects. In terms of government players, we have to consider the involvement of two sovereign countries, 10 state or provincial governments, a multitude of locally- controlled ports, countless local governments, multiple highway agencies, railroad commissions, etc. Additionally, there are many others, including business advocacy groups, environmental protection interests and more. Though there are some overarching studies done from time to time, there is little in-place that ultimately has the capacity to make much difference. It would take a monumental effort to create a joined-up business strategy as would be done in most other parts of the world. We do not advocate for centralized government planning, but we do identify that our ability to think big and engage the private sector is severely limited by the independent and decentralized systems. However, with leadership, this decentralized structure could create an environment that offers an ability to be entrepreneurial. With a dash of coordination and partnership, competition between countries, states, ports and regions may just yield a far more dynamic total-product. GREAT LAKES/SEAWAY REVIEW April-June, 2011 9 next generation of infrastructure. 2) Few current public resources – We are not now in “normal economic times” and won’t be for the foreseeable future. Governments have limitations on resources and there is no current outlook which suggests they will create substantial tax-supported public resources. Governments are cutting back and significant investments in such things as infrastructure will be difficult at best. 3) Need for new solutions and creativity – Due to few public resources and a substantial need, it is becoming more obvious that we must be open to new methods for developing (and maintaining) infrastructure. Governments alone may not have the vision, the will or the resources to make assets like the Great Lakes/St. Lawrence Seaway system as successful as it might be. Private interests in partnership with government can create powerful tools to evaluate market opportunities and support the public objective of growing the economy. The litmus test of a private risk capital investor adds a filter that could be helpful in some situations. Market, political and competitive risk factor analyses come into focus quickly with private interests involved. 4) Available private resources – There are substantial private financial resources in search of viable and stable long-term investment projects. If properly proposed, these resources may be attracted to solid business opportunities that take advantage of “full-system thinking,” where long-term capital returns can be supported by: a) Related government investments. b) Project investments in other supporting transport and property infrastructure. Investors like revenue certainty and are attracted to situations where their risk burden is mitigated by partners. 5) Available Seaway capacity – The system has capacity to handle more traffic, more cargo and generate more revenue. Though it might be appropriate to consider the big-think of expanding the Seaway at some point, this assessment is about the opportunity to grow business in the context of the current Seaway. If there were ever the opportunity to expand the Seaway, it would result from industry growth and demonstrating opportunities well-beyond the Seaway’s current function. The most practical objective is to grow the Seaway’s In most parts of the world, an inland waterway system such as the Seaway would be seen as a more significant asset for commerce and economic development than is generally the case in North America. I N F R A S T R U C T U R E The Canadian Seaway is amid a C$270 million upgrade to its infrastructure. SOURCE: SLSMC Canada Steamship Lines GREAT LAKES/SEAWAY REVIEW April-June, 2011 11 It is challenging to imagine something that does not yet exist and it is rather easy to point out the reasons (competition, weather, etc.) why the Seaway system has seen limits to its growth. The reality is that the world is so extraordinarily dynamic that most arguments are based on either last year’s data or last decade’s facts. It is critical to see the opportunity for what the market situation is today—and more importantly what it will likely be in three, eight or 15 years. In the business world, this happens all of the time. In highly-competitive environments, businesses develop new or enhanced products, form partnerships with strategic allies and compete into new markets. With good business intelligence, these businesses zero-in on the competitor’s vulnerabilities. It will not be simple to further success. Substantial inertia is required to change supply chain logistics patterns and competitive forces need to understand Seaway growth to be at a cost. At the same time this is the reality: markets are shifting, energy costs are skyrocketing, regulatory requirements are getting tougher and varying levels of congestion at certain hubs will return. Collaborative approach required. With the right business strategy, can a funded infrastructure investment plan help transform the ability of the Seaway system to compete? For businesses and investors to risk capital or supply chains on the Seaway, a system of coordinated investments must be demonstrated. It will take serious capital, calculated corporate patience, stamina and market reach to vault the Seaway system into new cargoes. This will require more than a thinly capitalized transport service that may be seen as unable to withstand a challenging start-up cycle and without the capacity to support a range of services. For example, a model for short sea service— carrying a diversified cargo mix from Monterrey, Mexico through the Port of Brownsville and on to Port Manatee in Florida via barge service across the Gulf of Mexico—shut down operations recently. Though there was a loyal and enthusiastic following of shipper customers, the business failed because it was not robust enough to grow the way it needed to and wasn’t a large enough player. It needed more capital, more equipment and more service to support the requirements of its customers and, in the end, a great business concept with little direct competition did not survive. Despite federal government grants to support the service, it did not sustain due to a lack of an all-in risk capital story. “Portcentric” activity is a significant part of the future. Ports are going to evolve from their historic transport terminal role to be thoroughly integrated places for commerce for a variety of economic activities, certainly to include distribution and some types of manufacturing. Merging land-economics considerations with evolving transport economics will be the key to make the case, but part of the opportunity (perhaps a significant part) will be in shippers wanting more direct access to port facilities. Infrastructure spending in context. In fiscal year 2007—the most recent year for which data on combined spending by federal, state and local governments is available—total public spending for transportation and water infrastructure was $356 billion, or 2.4 percent of the nation’s economic output as measured by its gross domestic product. By contrast, Europe invests 5 percent of its GDP on infrastructure, while China is vaulting into the next decades at 9 percent investment levels. America’s spending as a share of GDP has not approached European levels for more than 50 years and it shows in the overall quality of our infrastructure. According to a World Economic Forum study, U.S. infrastructure has gotten worse by comparison with other countries over the past decade. In its 2010 comparison chart, the U.S. now ranks 23rd for overall infrastructure quality. The U.S. transport spending figures include spending for all modes—for both maintenance and new build. If we do it right, we will be making-up for years of neglect on the maintenance side and, at the same time, trying to expand key assets to accommodate modern commerce and plan new infrastructure to grow our economy. The problem: our politically stated spending plans aren’t enough and the stated plans put forward by the Administration are being promoted without funding. Budget crises give birth to creative solutions and systems for delivery. Perhaps we are in the beginning of a “perfect storm” for transport infrastructure investment— huge need, a political awakening to the issue and substantially-reduced public resources. Most experts agree that North America is ripe for increasing its reliance on public-private partnerships. The U.S. in particular is seen as a laggard on this issue. It will take serious capital, calculated corporate patience, stamina and market reach to vault the Seaway system into new cargoes. I N F R A S T R U C T U R E SOURCE: SLSMC Upgrades include the Hands Free Mooring system, which attaches to a vessel’s side and rises and lowers as the water level changes. McKeil Marine Though we are supremely capitalist in our outlook about most things, we have sought to keep public and private roles and resources separate around certain issues. If nothing else, public-private partnerships can be a useful way to screen out poorly conceived projects that are unlikely to generate the promised returns. Growing port activity will require new and enhanced maritime terminal assets, new property and transport assets inside the gate, new property infrastructure outside the gate and new transport infrastructure connecting port to user. The Seaway is a substantial system of infrastructure on its own, but there is also a vast network of infrastructure at the ports, transport and property that intersect along the system. The Seaway’s success will, in part, be defined by the ability to deliver worldclass asset infrastructure at the ports, near the ports and to/from the ports. For the Seaway to reach its potential over its second 50 years, it will be critical for landside infrastructure modernization and new development to occur. Seaway-specific investment. Both the U.S. and Canadian Seaway entities are hard at work maintaining the vast systems of infrastructure they oversee. Starting in 2009, the Saint Lawrence Seaway Development Corporation initiated its multi-year Asset Renewal Program (ARP) for its navigation infrastructure and facilities. The capital investment plan produces a serious attempt to reinvest in the Seaway. In its FY 2012- 2016 budget, the SLSDC identified that prior to 2009, only $47 million in capital expenditures had been cumulatively invested in the Seaway locks since they opened on 1959. The budget points out that a “delay or shutdown at any one of the 15 U.S. or Canadian Seaway locks would cause system-wide delays.” In 1985, a lock failure at the Canadian Welland Canal caused 53 commercial vessels to be trapped in the system for 24 days at a cost to shippers of more than $24 million ($49 million in 2010 dollars). For the FY 2012- 2016 timeframe, the ARP includes 39 projects and equipment estimated at $100.2 million. The Canadian Seaway is amid a C$270 million infrastructure renewal program extending from 2010 to 2013 which includes replacement, reconditioning and upgrading of locks and bridges, as well as some dredging. Some of the most notable work entails stabilizing lock walls. Amassing funding. In President Obama’s budget for FY 2012, investment in transportation and infrastructure has been increased $34.8 million, or 38 percent, over 2010 spending. In the U.S., after decades of neglect, the federal government is discussing ways to support the expansion and modernization of its transportation infrastructure. In the White House and in Congress, there is now a strong recognition that we have underinvested in infrastructure and the issue of infrastructure seems somewhat more politically interesting. Both the Administration and Congress have put forth concepts regarding how to finance new infrastructure, and though different in their approach, there is a common thread of more federal involvement in building key assets important to the national infrastructure. The subscript to these proposals is that the U.S. is beginning to welcome private investment in ways not understood previously. Obama administration approach—In his FY 2011 budget, President Obama proposed a $4 billion infrastructure bank for transportation projects. The bank would have elements of both the Transportation Investment Generating Economic Recovery (TIGER) grant program and the Transportation Infrastructure Finance and Innovation Act (TIFEA) program, although TIGER was intended to be a short-term stimulus-related solution and not a longstanding program. The so-called I-Bank would fund or finance projects “that provide a significant economic benefit to the nation or a region” and “encourage collaboration among non-federal stakeholders including states, municipalities and private investors, and also promote coordination with investments in other infrastructure sectors.” The I-bank is intended to invest in a wide range of projects such as highways, tunnels, bridges, transit, commuter rail, passenger rail, freight rail, airports, aviation and ports. Target projects would be in the $25 million-plus range, with not all of the $4 billion available right away. The budget pro- GREAT LAKES/SEAWAY REVIEW April-June, 2011 13 I N F R A S T R U C T U R E Ports are going to evolve from their historic transport terminal role to be thoroughly integrated places for commerce for a variety of economic activities, certainly to include distribution and some types of manufacturing. SOURCE: SLSDC U.S. lock gates open after winter maintenance. Ports of Indiana 14 www.greatlakes-seawayreview.com I N F R A S T R U C T U R E poses $2 billion in infrastructure grants and $417 million to subsidize $2.1 billion of direct loans. About $270 million would fund administration, cost-benefit analyses, planning and other areas, with $1.313 billion left for FY 2012. Congressional approach—Among several proposals, one given support by both labor unions and the U.S. Chamber of Commerce is the BUILD ACT. The bipartisan legislation would create a national infrastructure bank that Senators are calling the American Infrastructure Financing Authority (AIFA). The plan, fairly simple in structure, would entail the federal government seeding AIFA with a $10 billion initial investment, after which the authority would be independent and self-sustaining. Projects could receive up to 50 percent of their financing from federal money, but the rest (ideally much more than half) will have to come through private investments. If all goes according to plan, the authority can expect to leverage hundreds of billions in private infrastructure funding over the next several years. The European Investment Bank (EIB), though top-heavy, has been seen by many to work well. Co-owned by the member states of the European Union, the EIB holds some $300 billion in capital which it uses to provide loans to deserving projects across the continent. Funding may provide up to half the cost for projects that satisfy EU objectives and are judged cost-effective by a panel of experts. The political forces that influence the U.S. government are finally seeing that a stronger commitment to the nation’s infrastructure is necessary and there will be a role for private investment in supporting these public projects. Canada federal investment—The Canadian government is calling Budget 2011 “The Next Phase in Canada’s Economic Action Plan.” Unlike the first, announced in Budget 2009, this phase of the Economic Action Plan does not include major new infrastructure spending. The budget commits the federal government to work with provinces, territories, the Federation of Canadian Municipalities and other stakeholders to develop a long-term plan for infrastructure that extends beyond the expiry of the Building Canada Plan. The current $33 billion Building Canada Plan (2007- 2014) is largely committed to existing projects. It announces the Federal government’s release of an Atlantic Gateway strategy and a Continental Gateway strategy covering Ontario and Québec and proposes to legislate an annual $2 billion investment in municipal infrastructure through the Gas Tax Fund, which distributes federal gasoline tax revenues to municipalities. Public-private partnerships in Canada— Budget 2011 announces that Public-Private Partnerships Canada (P3) will have a stronger role at the federal level. Federal departments will be required to evaluate the potential for using P3 for all infrastructure projects creating an asset with a lifespan of at least 20 years and having capital costs of $100 million or more. This is similar to the America’s spending as a share of GDP has not approached European levels for more than 50 years and it shows in the overall quality of our infrastructure. CAT Marine Power POWER OVER TROUBLED WATERS Marine transportation has a bright future even though rough seas remain in terms of ship emissions and operating costs. Navigating through this requires solid wisdom gained from past experience and the drive to understand and manage emerging realities. As your authorized Caterpillar and MaK dealers we can help. Talk to us about new engine-related environmental initiatives, planning and asset management. We know these waters well and can help you plot the most efficient and sustainable course. MaK sales and service in the: GREAT LAKES 1-877-MaK-Power QUEBEC, ATLANTIC CANADA AND NORTH EASTERN USA 902-468-0581 Caterpillar sales and service in: QUEBEC AND THE MARITIMES 902-468-0581 ONTARIO, NUNAVUT AND NEWFOUNDLAND 1-877- Cat-Power Visit us at: marine.cat.com The Great Lakes Group 16 www.greatlakes-seawayreview.com I N F R A S T R U C T U R E P3 screens adopted by various provinces, notably British Columbia. The budget document does not give details about PPP Canada’s role in administering the P3 screen. The P3 screen may only apply to federal projects proposed by a federal department, which could limit the applicability of the instrument, although it is still a positive signal for the pipeline of Design- Build-Finance-Maintain projects from the federal government. Private investment potential. Finding investors willing to invest in U.S. and Canadian infrastructure has been a problem in years past. Projects in other countries were comparatively more attractive, as these were in fast-growing, emerging markets in countries seeking to privatize public assets. These funds raised billions of dollars for investment in roads, pipelines and ports. Some analysts identify the windfall of economic stimulus money over the past few years as making the U.S. and Canada even less appealing. Over the past few years, as the U.S. government rushed to spend on infrastructure projects, the incentive for private investment in American projects slipped. Efforts like the Build America Bonds (BAB) program are designed to arrest that fall. A part of the Administration’s stimulus measure, BAB offers bonds that have a different tax treatment than the municipal bonds typically funding infrastructure projects. This effect is specifically designed to attract investment from pension funds, private equity funds and banks. By the end of 2010, municipalities raised more $120 billion in Build America Bonds. Certainly in the U.S., there has been far less experience than in Europe or parts of Asia in marrying public and private resources. The recent long-term concession of the Port of Brisbane in Australia for $2.1 billion put a spotlight once again on infrastructure investment and the comparative reluctance of private investors to get involved in such projects in the United States. Even as the Obama administration has pushed billions in stimulus spending into infrastructure projects, private investors say they have found better opportunities abroad. Infrastructure investors —mostly private equity funds that raised billions to invest in roads, natural gas pipelines and ports globally—have viewed the federal government as not interested in partnership with private players. With the new proposals for the iBank or AIFA, this will probably change, with projects that might not have happened otherwise moving forward through joint funding. According to the Organization for Economic Co-operation and Development, which represents 34 countries, established funds and institutional investors are “looking for new sources of return and better diversification” and increasingly looking to direct investments in infrastructure including port infrastructure. Globally, investors are ready to channel funds (presumably into the trillions of USD) into port and related infrastructure. Examples In the U.S., after decades of neglect, the federal government is discussing ways to support the expansion and modernization of its transportation infrastructure. Chamber of Marine Commerce GREAT LAKES/SEAWAY REVIEW April-June, 2011 17 I N F R A S T R U C T U R E include most major pension funds (such as Dutch APG, US CalPERS, Canadian OTPP etc.), Private Equity funds (such as Macquarie, Citi Infrastructure Partners, Brookfield Infrastructure Partners, Highstar Capital etc.), a larger number of sovereign wealth funds and many more. Beyond pure transportation assets, developments can be located at the port or off-port, but the industrial development opportunity is for “portcentric” activity— driving new cargoes and revenue to port organizations. This component of investment is critical because it is a direct reflection of private investment allied with the Seaway. Communities that have been successful in marrying property development risk capital investment with transportation infrastructure investment will be success stories. Regions along the Seaway have suffered by the lack of investment in basic transport (and other) infrastructure. In some regions, the situation is more acute, as these industrial regions have even older road, bridge, property and port-related assets than young regions. Much of the potential of the Seaway will be dictated by the economic health of these regions and their ability to efficiently move cargo in and out. While the Seaway and its condition, maintenance and dimensions might be popular topics of conversation, a hugely important issue is the health of regional infrastructure that feeds each port. With system needs far surpassing public- funding resources, the future of the Great Lakes/St. Lawrence Seaway is dependent on like minds working in the public and private sectors to create modern and high efficient capacity to handle more traffic more quickly. The federal government is fast maneuvering toward a mutually reliance with private investors to share the burden (and reward) for new roads, modern ports and the type of multi-modal connections needed to help the Seaway excel in the years to come. Importantly, it will be critical for ports and their partners to understand the new playing field in terms of assembling resources to support their growth ambitions. Critical steps include: 1) In-depth understanding of the potential market. Without a credible “upside,” it will be challenging to convince public sector or private sector investment. 2) Creating clarity about what the infrastructure/ asset development objectives— scope and cost—with support by the market fundamentals. 3) Understanding the options for pairing public and private resources and the legal (and political) issues involved. 4) Determining a delivery strategy that combines the market, infrastructure and financing elements. If the objective is to grow business and revenue and to support regional economic development, public bodies will need to become more aware and increasingly sophisticated about inviting private investment to pair up and support their public objectives. Ultimately, we are talking about public entities playing in a world they are somewhat unfamiliar with and it will be important to partner with advisors that can create highly credible market metrics and package the related project opportunities to the vast worlds of institutional, private equity and bank investors. The key will be to get the market side right and then carefully leverage as much public resources as possible. There will almost always be a delta where the public sector cannot or will not be able to invest an appropriate level of public resources. . CN Together we’ve built a partnership that delivers. www.cn.ca With our reliable supply chain partners, worldwide network and robust infrastructure, no single company delivers North America like CN. Seamless transfer, transportation and delivery. GREAT LAKES/SEAWAY REVIEW April-June, 2011 19 P O R T D E V E L O P M E N T “We’re the largest land mass port on the Great Lakes,” said Toledo-Lucas County Port Authority Director of Cargo Development Joe Cappel. Midwest Terminals has added 5,000 feet of new rail line while replacing an additional 12,000 feet of existing line. Roadway relocation has created an additional 15 acres of space in the terminal, bringing the total to 125 acres. Managing properties port wide and creating an environment for efficient movement of cargo has been accomplished through new cranes and equipment—a pair of Liebherr LHM 280 and a Mantsinen RB 200 with grabs, magnet and spreader—and reconfigured routing to improve cargo handling time and improve the efficiency of vessel calls. Land acquisition in Hamilton. On the Canadian side of the border, Hamilton’s acquisition of a 100-acre plot on Pier 22 adjacent to existing steel mill lands has created opportunities to find new efficiencies in terminal operations and consider efficient placement of future operations. Already this year, the port has made a further acquisition of a warehouse facility with connectivity to existing Pier 10 operations. Previously announced agreements with McAsphalt Industries Inc. and Parrish & Heimbecker will utilize nearly 20 acres of land and realize private sector investment in excess of C$60 million. This has also positioned the port to target an additional one million metric tons of annual cargo volume. Replenishing the land bank through Mutual benefit Cargo capacity feeds land planning and distribution In the current climate of mounting congestion, the ties that bind water and surface transportation are ever strengthening and necessitating strategic intermodal development. Pressures arising from surrounding communities, finite land demands and environmental controls have placed port footprints increasingly under scrutiny. Transportation opportunities derived from strategic land acquisition and planning are significant, with connects among the various modes and between terminal developments. On both sides of the border, ports are proactively searching for niche development and opportunities to reach a broader business audience. The port cities of Toledo, Ohio and Hamilton, Ontario are mirrored in their unremitting focus to increase land holdings and spur capacity growth. Ports are approaching their role in the greater context of regional economic development impact, considering ancillary services that feed goods movement in multiple directions and across business sectors. Both Toledo and Hamilton are developing new websites and related content which intend to engage commercial property interests and developers outside of the traditional maritime realm. The use of online business resources has meant a greater voice beyond the region, offering ports the opportunity to have dynamic digital interaction to bring potential development to the table. Brownfield redevelopment occurring. In Toledo, the acquisition of two land parcels—the 180 acre former Chevron Ironville Docks and the 111 acre Jeep Parkway property—has expected investment of between $2-3 million and will generate 25 new jobs. Toledo and Hamilton both have recognized the benefit in working with other transportation entities to collectively promote their regions as multimodal centers. Toledo’s new land will house a new Midwest Terminals facility, set to open in 2012. It will handle grain while also improving rail connections to the Norfolk Southern Line. On both sides of the border, ports are proactively searching for niche development and opportunities to reach a broader business audience. This rendering for the Toledo Jeep Parkway Property shows plans for its development. Port of Cleveland Full service, fast, access, high quality and low cost. The Port of Cleveland is the only choice. Businesses around the world rely on the Port of Cleveland. You too, can give your business a lift with the Port of Cleveland’s maritime services including: • 9 berths and 6,500 linear feet of dock space maintained at full Seaway depth of 27 ft. • Heavy-lift crane capacity of 150 short tons. • More than 350,000 square feet of warehouse space and one million square feet of open storage. • Connections to all major interstates and direct access to two major railroads (CSX and Norfolk Southern). The Port of Cleveland… More Than a Working Waterfront 1375 East 9th Street Suite 2300 Cleveland, Ohio 44114 216.241.8004 phone 216.241.8016 fax www.portofcleveland.com Both ports are also intent on committing segments of land for community development— parks with access to the waterfront, landscaping and beautification of pier gateways. Scarcity of suitable land and pressures from multiple influences on how best to develop property have coupled to increase the pressure on ports to build long-term strategies to meet future marine commerce demands. Balancing these factors with revenue generation needed to fund future essential infrastructure improvements has led ports to zero in on highest and best use across the expanse of waterfront properties. Brent Kinnaird . GREAT LAKES/SEAWAY REVIEW April-June, 2011 21 P O R T D E V E L O P M E N T reaching out to explore additional brownfield acquisition is essential for Hamilton to continue to grow and support the Canadian marine industry. In 2008, port management developed a strategic plan which called for authority and tenant combined investment of C$500 million in land and facilities by 2020. Already, 47 percent of the planned targeted investment has been made, committed or is being currently negotiated. Tight relations with the City of Hamilton’s Economic Development office ensures that Hamilton’s port is being promoted outside of the maritime community and used to strategically attract new business. This alliance has helped to generate annual throughput of more than C$2 billion. Environmental awareness, skilled labor. Security, risk and environmental assessment processes are also a contiguous trend among the two ports. Reducing the carbon footprint across the expanse of warehousing, office and storage yard facilities is being built into the land-use planning process and remains in the consciousness of all development projects. Access controls have delivered heightened safety and security awareness with the port offices and facility operations, with Midwest Terminals Toledo boasting 675,000 square feet of warehouse and offering Foreign Trade Zone London Metal Exchange and MYMEX designated space. Skilled workforces, with roots in the steel and auto industries now avail themselves to advanced manufacturing, warehouse management and logistics which are taking root in new terminal expansion and improvement. According to Ian Hamilton, Vice President at the Hamilton Port Authority, the port plans to double its volume of non-steel related cargo and has dedicated pier space to receive, stage and transfer project and heavy-lift components. They have experienced resurgence in wind energy, pressure vessel and other oversized pieces through positioning available land capacity in the market. Additional lands provide the needed flexibility to attract a further diversified cargo mix. Reserving terminal space for significant project cargo opportunities that arise and balancing this with the need to service continual dry and liquid bulk facility demands is aided by availability of new property. Encouraging bulk storage capacity growth also remains in the plans. The old buildings at the Toledo Shipyard were demolished as Ironhead Marine Inc. modernizes the facility. Fednav’s Federal Patroller alongside Pier 14 at the Port of Hamilton, site of the new RUBB cargo facility operated by Federal Marine Terminals. T H E 2 0 1 0 S E A S O N 22 www.greatlakes-seawayreview.com For the second season running, grain is a key cargo in boosting the system’s tonnage. SOURCE: JERRY BELICKI GREAT LAKES/SEAWAY REVIEW April-June, 2011 23 T H E 2 0 1 0 S E A S O N sector, characterized by a resurgent domestic auto assembly business, the level of activity in the iron ore trade broke out of the starting gate at a brisk pace in 2010,” Bowles said. The 10 percent increase in grain, from 8.181 to 9.207 million metric tons, represents the third consecutive year the commodity has substantially improved the season’s outcome. When grain exports peaked, it created late-season activity to get wheat, corn and soybeans to markets in Europe, the Middle East and Africa. The increase was due to weather-related issues that resulted in poor harvests in regions such as Russia, Ukraine and Kazakhstan, creating a larger market for North American growers. According to Johnson, the annual increases in grain exports should be considered as a change in trading patterns. Growing populations and increasing standards of living in countries such as China, India and Indonesia result in a growing number of meat-eaters, which requires significant amounts of grain to feed livestock. General cargo, which consists primarily of iron, steel breakbulk and project cargo, bumped from 911,000 to 1.550 million metric tons. And coal tonnage increased to 3.6 million metric tons, up 28 percent over 2009 numbers. Other bulk cargo increased from 11.748 to 12.280 million metric tons, with salt totals slipping in 2010, primarily due to available stock and a warmer winter. Interlake trade. Tonnage for North American carriers increased substantially over the year: 22.2 million net tons (20.1 metric tons) for U.S. lakers belonging to Lake Carriers’ Association (LCA

Maritime Editorial