Vol.40 No.2 OCT‑DEC 2011

2O C T O B E R – D E C E M B E R 2 0 1 1 The system’s economic impact . CSL’s four newbuild lakers . Repowering projects . 3D technology V O L U M E 4 0 N U M B E R 2 G LGREAT LAKER 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 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. Also available as a fully interactive digital magazine. 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 O C T O B E R – D E C E M B E R 2 0 1 1 Dateline: Great Lakes/St. Lawrence Seaway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 The Administrator’s Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Regional Shipyard Activity Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Naval Architecture & Engineering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Economic Impact MORE THAN FACTS AND FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 New economic impact tells the story of jobs, families, futures. ABOUT THE STUDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Binational collaboration produces powerful results. Economic Outlook LOOKING AHEAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Economy to remain on steady course through 2012. Shipbuilding CSL’S GREAT LAKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Four newbuilds reflect a new era in shipping. RENEWAL OF VESSEL LIFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Repowering projects moderize the fleet. PROJECT TIMELINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Detail, good planning and adequate funding critical to success. Interview LEADING THE WAY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Rod Jones speaks on CSL’s new season of fleet renewal. Technology GOING DEEPER FOR NEW HEIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . 39 Leveraging the use of 3D technology to safely carry more cargo. Grain GROWTH SPURT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Quality grain keeps North America on the world stage. Great Lakes Galleys RECIPE FOR A GREAT GALLEY . . . . . . . . . . . . . . . . . . . . . 57 Variety, attitude, pride in work are all on the menu. Great Lakes People A MODEL OF SUCCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 One man’s vision proves to be his legacy. Meet the Fleet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Laker Library Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 On the Radar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 GREAT LAKER D E P A R T M E N T S GREAT LAKES/SEAWAY REVIEW October-December, 2011 1 Canada Steamship Lines’ four newbuild lakers reflect a new era. Page 21. 3D technology aids in mapping draft potential. Page 39. Ship chefs share their recipes. Page 57. 2 www.greatlakes-seawayreview.com 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 40 OCTOBER-DECEMBER 2011 NUMBER 2 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; Mark Barker, President, The Interlake Steamship Company; Noel L. Bassett, Vice President-Operations, American Steamship Company; Dale Bergeron, Maritime Transportation Specialist and Educator, Minnesota Sea Grant; David Bolduc, Executive Director, Green Marine; 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; Mike Wallace, Member of Parliament, Burlington, Ontario; 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: Saltie at Duluth. Photo by Jerry Bielicki. Great Laker Cover: Inside the galley on Great Lakes vessel. Photo by Mike Sipper. 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 Cleveland Shiprepair Company shuts down In September, Cleveland Shiprepair was closed. The topside shipyard was owned by Fincantiere Marine Group, which also owns Bay Shipbuilding, Marinette Marine and ACE Marine. The companies became part of the Italian enterprise December 31, 2008 when it purchased Manitowoc Marine. According to Gene Caldwell, Vice President and General Manager at Bay Shipbuilding, the decision to close the shipyard was difficult, one which meant letting go of good workers. “It just became a logistical and financial decision,” he said. For more shipbuilding coverage, please see pages 21-29. . New leadership at CSL Canadian Steamship Lines, (CSL) will transition to a new executive management team April 1, 2012. Louis Martel will take the helm of the CSL Group’s Canada Steamship Lines division as President, succeeding Gerry Carter who is retiring. Martel joined CSL as a naval architect in 1997. He led the design phase of the group’s current Trillium Class fleet expansion project, a major capital investment initiative that will see seven new self-unloading vessels delivered beginning in 2012, four to CSL and three to CSLI. Additional appointments include: Kirk Jones as incoming Vice-President, Sustainability, Government and Industry Affairs and Dan McCarthy as incoming Vice-President, Marketing and Customer Service. They are replacing Tom Brodeur, who is retiring June 1. Briditte Herbert is being named Manager of Communications, replacing Sylvie Lafleur who is retiring May 1. Other members of the management team include Claude Dumais, Vice-President, Technical Operations and Harry Christopulos, Controller. . GREAT LAKES/SEAWAY REVIEW October-December, 2011 3 Floyd Miras has been named Director of the U.S. Maritime Administration’s (MARAD) Great Lakes Gateway Office. He oversees the Gateway’s programs, including mariner education at the agency’s only Fire Training Center and promotion of the Marine Highway Program. Miras has been with MARAD 19 years, all of them at the Great Lakes Gateway Office. He is a member or observer of a number of organizations relating to the maritime industry, including the Great Lakes Dredging Team, Great Lakes Commission and Great Lakes Maritime Research Institute. He has also been a field reviewer for the Port Security Grant Program and is a longstanding member of the U.S. Department of Transportation’s Emergency Response Team, supporting the Federal Emergency Management Agency’s missions. Prior to public service, his logistical background included movement of international cargoes through the Great Lakes/St. Lawrence Seaway system. The agency’s Great Lakes Gateway Office has relocated to 500 W. Madison Street, Suite 1110, Chicago, Illinois 60661, (312) 353-1032. . DATELINE Chicago waterway studies move forward, one to release in 2012 With nearly two years passing since the launch of two studies on potentially separating the Great Lakes from the Mississippi River system near Chicago, Illinois, one study is due to release early next year. Phase three of the Great Lakes Commission Chicago Area Waterway study is scheduled for completion this year with final options to be narrowed down to three prior to public release. The Great Lakes Commission (GLC) began evaluating the option of ecologically separating the Mississippi River and Great Lakes watersheds in the Chicago Area Waterway System (CAWS) in July 2010. According to GLC, the goal of the study was to evaluate potential options for ecoseparation, their costs, benefits and impacts to prevent the advance of aquatic invasive species. The study is being done separately from the U.S. Army Corps of Engineers Great Lakes and Mississippi River Inter-Basin Study (GLMRIS). A baseline assessment of noncargo CAWS traffic was released by the Corps as part of the Great Lakes and Mississippi River Inter-Basin study in October. It targeted lock traffic by commercial passenger, recreation and government vessels through the waterway system. This document serves as a baseline assessment of lock traffic by commercial, passenger, recreation and governmental vessels. Further, the report will inform and educate on past and current usage of the Chicago Area Waterway System locks and non-cargo lock traffic from which to compare possible changes as a result of the potential implementation of aquatic nuisance species (ANS) controls. As part of the process the Corps is working with other federal agencies, Native American tribes, state agencies, local governments and non-governmental organizations on the GLMRIS to reduce the spread of ANS between aquatic pathways. . Floyd Miras Approximately 150 metric tons of milling equipment, shipped from Spain, arrived at Keefer Terminal October 31 and was transported in a convoy of three superloads from the Port of Thunder Bay to Timmins, Ontario. Don Anderson Haulage Limited moved the cargo via Highway 11, with each cylindrical mine milling unit weighing 60 metric tons. The load was transferred on behalf of Lake Shore Gold Corp., a Canadian gold mining company which is expanding its Timmins-based Bell Creek Mill. Louis Martel The staff of Great Lakes/Seaway Review welcomes David Bolduc, Executive Director for Green Marine, and Mark Barker, President of the Interlake Steamship Company, to the magazine’s Editorial Advisory Board. Board members contribute to the value of the magazine in many ways, including contributing Guest Editorials and by sharing their views on matters critical to the continued success of the commercial shipping industry in the Great Lakes/St. Lawrence Seaway system. Bolduc and Barker join a list of esteemed decision-makers to assist the magazine in accurately reflecting the priorities of the system. . Great Lakes/Seaway Review welcomes new Editorial Advisory Board members Miras becomes Director of Great Lakes Gateway Office SOURCE: DON ANDERSON HAULAGE LIMITED D A T E L I N E 4 www.greatlakes-seawayreview.com New Orleans, Louisiana. Attendees spent two days in Houston touring the Port of Houston and Texas Terminals before departing to tour the Port of New Orleans. Networking events were held in both locations. The trade mission’s goals are to promote the use of the Great Lakes/St. Lawrence Seaway system as a viable, reliable and cost effective route for vessel operators and cargo movements. “We need to better benchmark our competition,” said Bruce Hodgson, Director, Market Development for SLSMC, noting he had been in Houston about a year and a half ago and his contacts there assisted with scheduling and creating connections. “Our intention was to educate industry leaders in Houston about the opportunities available for moving cargoes throughout the Great Lakes/St. Lawrence Seaway system,” said Rebecca Spruill, Director, Trade Development for SLSDC. “For example, the freight forwarders we met during our networking sessions are based in Houston; however, they have the option of selecting the transportation route for their cargo.” Spruill also said future domestic trade missions will be scheduled based on the success of the first. “We need to continue to target and educate key transportation professionals responsible for identifying and selecting their company’s transportation freight routes,” she said. “If they are unaware of the competitive benefits the Great Lakes/St. Lawrence Seaway system offers, we will fail to achieve our goal of increasing system tonnage handling. Freight forwarders and third party logistics providers are essential to our domestic marketing outreach efforts. During our networking sessions with these two entities, it was crystal clear they were extremely interested in what we had to say about the Great Lakes/St. Lawrence Seaway system.” Representatives from the ports of Milwaukee, Sept-Iles, Thunder Bay, Cleveland and Duluth, as well as Fednav attended meetings in Houston. They were joined by representatives from the ports of Toledo, Hamilton and Oshawa, as well as Midwest Terminals in New Orleans. The next trade mission has been scheduled for June 4-8, 2012 to Greece. More details will follow as they become available. . Expanded marine facility opens in the Port of Windsor With the completion of new facilities at the Port of Windsor, vessels in the Great Lakes can now unload while refueling. Sterling Marine Fuels, McAsphalt Industries Limited and The Miller Group completed port facility and dock improvements in November. The projects— including an extended dock, 20-acre storage 2011 Seaway domestic trade mission successful Seaway stakeholders received a firsthand look at some of the system’s competition during the U.S. Saint Lawrence Seaway Development Corporation (SLSDC) and Canadian St. Lawrence Seaway Management Corporation (SLSMC) domestic trade mission October 23-28. When determining to move the fall trade missions back to June, delegates of Hwy H2O suggested a domestic trade mission during the interim. According to the Seaway entities, Texas was targeted because a significant amount of cargoes that could potentially move through the Great Lakes/St. Lawrence Seaway system utilize other transportation modes and routes, such as truck, rail and barge, to reach final international destinations after first moving their shipments through Texas ports and terminals. The domestic trade mission also coincided with the Breakbulk Americas exhibition in REGIONAL CALENDAR D A T E L I N E GREAT LAKES/SEAWAY REVIEW October-December, 2011 5 facility, new loading-unloading facility and housing for storage and administration—improves the handling of petroleum products and aggregate materials. The total project cost exceeds C$20 million, with the Government of Canada contributing C$10.1 million under the Infrastructure Stimulus Fund. The remainder of the money will be contributed by Miller- McAsphalt, according to port officials. “This will allow us to meet the projected increase in demand for liquid asphalt and construction aggregates generated by the many significant projects in the region over the coming years,” said Peter Kelly, Vice President and General Manager of Sterling Marine Fuels. . Georgian College receives C$1.5 million for new marine center As a result of a large donation, the most sophisticated marine navigation simulator at Georgian College’s marine training center will be named after Jack Leitch. According to Georgian College, Leitch donated C$1.5 million to the Great Lakes International Marine Training and Research Centre (GLIMTRC), located at the Owen Sound Campus. The center features four navigational training bridges and an engine room simulator. Leitch is Chairman for the Upper Lakes Group, Inc. His donation completes Georgian College’s C$2.5-million fundraising campaign in support of the GLIMTRC. In addition, the federal and provincial governments contributed C$1.4 million and C$3.75 million, respectively, to fund the project. “Graduates of Georgian’s marine programs have been a crucial component of the Canadian shipping industry,” Leitch said. “It is an honor to have the opportunity to support the future leaders of the industry that has been such a significant part of my life.” . Donjon Shipbuilding names new general manager Donjon Marine, Co., Inc. has named Paul Deterding General Manager of Donjon Shipbuilding and Repair, LLC, in Erie, Pennsylvania. Deterding will oversee the daily operations of the facility, including production, engineering, plant maintenance and administrative duties. Deterding has more than 25 years of experience in the marine, electrical and fire protection industries, serving most recently as Vice President and Part Owner of SEC Fire, LLC. He also served in the U.S. Navy from 1972-1984 as an electrician, recruiter, instructor and Quality Assurance Supervisor. He is a graduate of Faulkner University in Montgomery, Alabama. . JANUARY 20 Marine Club Annual Dinner Royal York Hotel, Toronto, Ontario www.themarineclub.org 22-26 Transportation Research Board Annual Meeting, Washington, D.C. www.trb.org/AnnualMeeting2012/ AnnualMeeting2012.aspx FEBRUARY 9-12 Annual I.S.M.A. Convention Days Inn and Conference Centre Owen Sound, Ontario Isma.lodge15@gmail.com 20-24 Great Lakes Waterways Conference Hyatt Regency at the Arcade, Cleveland, Ohio www.greatlakeswaterwaysconference.com 27-29 Great Lakes Days, Washington, D.C. www.glc.org/greatlakesday MAY 29-30 Green Tech 2012 Loews Hotel Le Concorde Quebec City, Quebec www.green-marine.org CARGOCAPITAL GreatLakes Take a load off. With more than 20 docks in service, when it’s time to “take a load off” in the Twin Ports, there’s plenty of room to maneuver. In addition to outbound shipments of iron ore, coal and grain, docks here handle inbound loads of limestone, cement and salt, plus heavy-lift equipment and other project cargo. The Port of Duluth-Superior is known for its cargo-handling expertise. From water to road and rail, this port and its people guarantee seamless transport for customers around the Great Lakes and the world. PORT of DULUTH-SUPERIOR 218.727.8525 www.duluthport.com 6 www.greatlakes-seawayreview.com E C O N O M I C I M P A C T When a longshoreman is called to help unload a ship arriving dockside, he’s just one of 226,833 people who support their families through cargo moving along the Great Lakes/ St. Lawrence Seaway system. When checks are cut by family-owned maritime businesses within the eight Great Lakes states and two Canadian provinces that constitute the system’s region, it’s just a portion of the $34 billion in annual business revenue— 14 billion in personal income—created by moving bulk, break-bulk and project cargo in 2010. When a ship is fully loaded, it minimizes the region’s carbon footprint by being part of the most environmentallyfriendly form of transportation. These are just a few examples of how day-to-day life along the system makes a quiet, yet significant, impact on the region. And although there have always been good stories to tell, the “Economic Impacts of the Great Lakes-St. Lawrence Seaway System 2010,” released in October, is serving as a new foundation of facts. In addition to providing direct and indirect jobs and business revenue, the study shows how the industry feeds other crucial sectors, such as office supplies, communications, utilities, fuel, maintenance and repair, goods/parts, More than facts and figures New economic impact tells the story of jobs, families, futures 67,905 INDIRECT JOBS U.S AND CANADIAN 66,005 INDUCED JOBS U.S AND CANADIAN BILLION 33.6 BUSINESS REVENUE 34.6 $ CDN $ US BILLION 6.4 LOCAL PURCHASES 6.6 $ CDN $ US GREAT LAKES/SEAWAY REVIEW October-December, 2011 7 planners, government policymakers and the public with a realistic assessment of the contributions of the system to the regional economy. In addition to the system-wide numbers, analysis is subdivided for 32 participating ports, by what flags the vessel sails and the impact of the pending New York ballast water regulation (see pages 15-16 for details on this portion of the study). “The economic benefits of Great Lakes/ Seaway shipping are far-reaching,” said Terrance Bowles, President and CEO of the St. Lawrence Seaway Management Corporation. “Not only is marine shipping creating jobs in Canadian communities, but marine-related industries and employees are contributing significantly to the general prosperity of Canadian society by providing C$4.6 billion in personal income. In addition, North American farmers, steel producers, construction firms, food manufacturers and power generators depend on the 164 million metric tons of iron ore, coal, stone, salt, sugar, grain, steel, wind turbines and machinery that are delivered by ships every year to keep their businesses running.” With 2010 shipping below five-year averages, already high numbers are expected to increase with the economic rebound when the study is updated in the next five years. Please go to www.marinedelivers.com for additional details. Janenne Irene Pung . E C O N O M I C I M P A C T contracted services, insurance and more. In 2010, 322.1 million metrics tons of cargo were handled by all U.S. and Canadian ports and marine terminals in the system, according to the report summary. “The study shows again that the Great Lakes and St. Lawrence Seaway are an important part of the economic development plan for the United States,” said U.S. Transportation Deputy Secretary John Porcari. “From our perspective in the Obama Administration, it’s more important than ever that we make sure our waters are clean and safe and bustling in trade.” According to Collister Johnson, Jr., Administrator for the Saint Lawrence Seaway Development Corporation, the power of the study comes in several forms: • It’s the first time a bi-national study has been completed that encompasses the entire system. • The study was conducted by a premier maritime analyst, Martin Associates of Lancaster, Pennsylvania and 900 interviews were conducted during the process. • The numbers speak volumes about the value of the system, not just to move cargo, but in the everyday lives of more than a quarter of a million people who are employed because of the industry and the $4.6 billion in federal, state, provincial and local tax revenue generated. “These are big numbers,” Johnson said, “bigger than I expected.” The purpose of the study is to provide the navigation community, transportation 0 5 10 15 20 25 30 35 State/Provincial & Local Taxes Federal Taxes Local Purchases Personal Income Business Revenue $ Billions . Total . United States . Canada DIRECT DIRECT 48,288 44,634 DIRECT 92,923 INDUCED 21,947 INDUCED 44,057 INDUCED 66,005 INDIRECT 28,320 INDIRECT 39,585 INDIRECT 67,905 0 50,000 100,000 150,000 200,000 250,000 Total United States Canada TOTAL 98,556 TOTAL 128,227 TOTAL 226,833 TOTAL SYSTEM FINANCIAL IMPACT BY COUNTRY TOTAL UNITED STATES CANADA (1,000) US $ Cdn $ US $ Cdn $ US $ Cdn $ Business Revenue $33,561,032 $34,567,863 $18,135,715 $18,679,787 $15,425,317 $15,888,076 Personal Income 14,114,227 14,537,654 9,650,959 9,940,487 4,463,268 4,597,166 • Direct 4,362,985 4,493,875 2,052,776 2,114,360 2,310,209 2,379,515 • Re-Spending/ Local Consumption 6,853,182 7,058,777 5,974,194 6,153,420 878,987 905,357 • Indirect 2,898,060 2,985,002 1,623,988 1,672,707 1,274,072 1,312,294 Local Purchases 6,413,744 6,606,156 3,040,143 3,131,347 3,373,601 3,474,809 Federal Taxes 3,052,853 3,144,439 1,737,173 1,789,288 1,315,681 1,355,151 State/Provincial & Local Taxes 1,530,634 1,576,553 945,668 974,038 584,966 602,515 NOTE ALL GRAPHS: TOTALS MAY NOT ADD DUE TO ROUNDING. SOURCE ALL GRAPHS: THE ECONOMIC IMPACTS OF THE GREAT LAKES-ST. LAWRENCE SEAWAY SYSTEM 2010. TOTAL SYSTEM IMPACT ON JOBS BY COUNTRY 92,923 DIRECT JOBS U.S AND CANADIAN BILLION 14.1 PERSONAL INCOME 14.5 $ CDN $ US GREAT LAKES/SEAWAY REVIEW October-December, 2011 9 For many years, the Great Lakes/St. Lawrence Seaway system maritime community has been afflicted by a lack of good, transparent and relevant data. Whether related to trade and traffic results, economic conditions or environmental effects, credible and timely data for the system have long been nonexistent. Without such current and reliable data, the ability to have an honest and substantive debate about the benefits of maritime transportation is nearly impossible. In recent months, many in the Seaway’s maritime community have taken steps to address this data deficiency. The first indication that a “sea change” is underway in filling data gaps and obtaining reliable and useful information is the recent release of a groundbreaking U.S.- Canadian Great Lakes/Seaway economic impact study. In the summer of 2010, several members of the system’s maritime community began conceptualizing the development, for the first time, of a binational maritime commerce economic impact study. In the past, significant methodological and statistical differences for data provided by the U.S. and Canadian governments made such a timely and compatible analysis unfeasible. Recent improvements to national and regional economic and census-related data in the United States and Canada, however, made such an undertaking a sound reality. In October 2010, the American Great Lakes Ports Association, on behalf of several U.S. and Canadian maritime industry stakeholders, retained Dr. John Martin and his firm, Martin Associates of Lancaster, Pennsylvania to perform this first-of-itskind economic analysis. Martin Associates is internationally recognized for its work on port economic analyses and strategic planning. Over the past 25 years, Martin and his staff have completed more than 250 domestic and international studies for ports and waterway systems all over the globe. They have done considerable work in the Great Lakes region over that time. Most no- About the study Binational collaboration produces powerful results IMPACT ON JOBS BY STATE Cargo Moving via U.S. Ports and Marine Terminals on the Great Lakes-St. Lawrence Seaway System IMPACT ON JOBS BY PROVINCE Cargo Moving via Canadian Ports and Marine Terminals on the Great Lakes-St. Lawrence Seaway System DIRECT 15,516 DIRECT 8,504 DIRECT 10,603 INDUCED 17,852 INDUCED 9,222 INDUCED 8,061 INDIRECT 14,964 INDIRECT 10,355 INDIRECT 8,155 DIRECT 924 INDUCED 763 INDIRECT 280 DIRECT 291 INDUCED 310 INDIRECT 252 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Indiana Ohio Michigan New York Pennsylvania DIRECT 28,894 INDIRECT 19,394 INDUCED 12,743 INDUCED 9,205 INDIRECT 21,906 INDIRECT 6,414 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Ontario Quebec Ontario Quebec Indiana Ohio Michigan Minnesota Illinois Wisconsin New York Pennsylvania TOTAL JOBS UNITED STATES 128,227 TOTAL JOBS CANADA 98,556 TOTAL 48,332 TOTAL 28,081 TOTAL 26,819 DIRECT 2,516 INDUCED 2,258 INDIRECT 1,496 Minnesota TOTAL 6,271 DIRECT 2,813 INDUCED 2,521 INDIRECT 1,842 Illinois TOTAL 7,177 DIRECT 3,466 INDUCED 3,071 INDIRECT 2,240 Wisconsin TOTAL 8,777 TOTAL 1,967 TOTAL 854 TOTAL 63,542 TOTAL 35,013 “The economic benefits of Great Lakes/ Seaway shipping are far-reaching. Not only is marine shipping creating jobs in Canadian communities, but marine-related industries and employees are contributing significantly to the general prosperity of Canadian society by providing C$4.6 billion in personal income. In addition, North American farmers, steel producers, construction firms, food manufacturers and power generators depend on the 164 million metric tons of iron ore, coal, stone, salt, sugar, grain, steel, wind turbines and machinery that are delivered by ships every year to keep their businesses running.” Terrence Bowles, President and CEO The St. Lawrence Seaway Management Corporation E C O N O M I C I M P A C T KEVIN P. O’MALLEY Director, Office of Budget and Programs U.S. Saint Lawrence Seaway Development Corporation 10 www.greatlakes-seawayreview.com “For the first time, we have a definitive, detailed, peer-reviewed study documenting the enormous contribution which the maritime industry provides to the Great Lakes/St. Lawrence Seaway region. The jobs sustained by the maritime industry include not only those located directly on the waterfront—longshoremen, terminal employees, vessel operators, pilots and truckers—but also steelworkers, miners, grain farmers and construction workers, many of whose jobs would disappear but for a vibrant, healthy maritime industry.” Collister Johnson, Jr., Administrator Saint Lawrence Seaway Development Corporation “As the largest tonnage port on the Great Lakes, we know what an integral role maritime commerce plays in the economic vitality of this entire region. But to finally have a system-wide study done with reliable data that helps identify the public return on investment now provides a framework for developing maritime policy at all levels of government to ensure this transportation corridor remains viable.” Adolf Ojard, Executive Director Duluth Seaway Port Authority “The clear message in the results of the economic impacts study is that the Great Lakes/Seaway system is a major contributor to the economic growth of companies that use and benefit from the system. Every business person wants to follow success, and these numbers, especially those reflecting business revenues, will give confidence to any company considering locating or doing business on the Great Lakes. For those of us in economic development, having these numbers available will support our efforts and make our jobs easier as we market the system to new users and investors.” Eric Reinelt, Port Director, The Port of Milwaukee “The study will help the marine shipping industry raise awareness of its value to Great Lakes/Seaway communities and the wider Canadian and U.S. economies. The Great Lakes/St. Lawrence Seaway system provides a safe, cost-efficient and sustainable way for Canadian farmers, oil refineries, steel producers, energy, mining and construction companies to transport their goods from province to province and to the U.S. and overseas markets.” Ray Johnston, President Chamber of Marine Commerce tably, Martin Associates completed the waterway’s last significant system-wide economic impact study in 2001 looking at the impacts to the U.S. economy. This binational impact study was funded and developed by several leading U.S. and Canadian stakeholders, including the American Great Lakes Ports Association, U.S. Saint Lawrence Seaway Development Corporation, Canadian St. Lawrence Seaway Management Corporation, Lake Carriers’ Association, Great Lakes Maritime Task Force, Fednav Limited, Algoma Central Corporation and Canada Steamship Lines. In addition, technical and project management assistance was provided by Transport Canada. The methodology for this economic analysis is based on the analysis of a core group of 32 Canadian and U.S. Great Lakes/Seaway system ports. To measure the impacts of marine cargo moving through the other ports and terminals in the system, Martin Associates developed unique prototype economic impact models. After several months of interviewing nearly 1,000 U.S. and Canadian businesses, analyzing trade, census and demographic data and developing models that address multiplier effects, Martin Associates completed its preliminary results for presentation to the study sponsors in June 2010. can become Qualify as New Business on the Seaway and you save 20% on tolls If your cargo qualifies as New Business, you can add to your savings by shipping via the Great Lakes St. Lawrence Seaway System. New Business can include cargo that has a new origin, a new destination, or that was previously moving via a different mode of transportation. Or cargo that has not been previously shipped via the Seaway in the last 5 years in a volume larger than 10,000 tonnes. Visit our website for details and an application to qualify. www.hwyh2o.com GREAT LAKES/SEAWAY REVIEW October-December, 2011 11 State & Local Taxes Federal Taxes Local Purchases Personal Income Business Revenue 0 1 2 3 4 5 6 7 8 9 10 . Indiana . Ohio . Michigan . Wisconsin . Illinois . Minnesota . New York . Pennsylvania $ Billions Provincial Taxes Federal Taxes Local Purchases Personal Income Business Revenue 0 1 2 3 4 5 6 7 8 9 10 . Ontario . Quebec $ Billions ONTARIO QUEBEC (1,000) US $ Cdn $ US $ Cdn $ Business Revenue $9,360,290 $9,641,098 $6,065,027 $6,246,978 Personal Income 2,743,471 2,825,775 1,719,797 1,771,391 • Direct 1,288,019 1,326,659 1,022,190 1,052,856 • Re-Spending/ Local Consumption 515,208 530,664 363,780 374,693 • Indirect 940,245 968,452 333,827 343,842 Local Purchases 2,419,844 2,492,439 953,757 982,370 Federal Taxes 908,089 935,332 407,592 419,820 Provincial Taxes 236,076 243,158 348,890 359,357 FINANCIAL IMPACT BY STATE Cargo Moving via U.S. Ports and Marine Terminals on the Great Lakes-St. Lawrence Seaway System FINANCIAL IMPACT BY PROVINCE Cargo Moving via Canadian Ports and Marine Terminals on the Great Lakes-St. Lawrence Seaway System INDIANA OHIO MICHIGAN WISCONSIN (1,000) US $ Cdn $ US $ Cdn $ US $ Cdn $ US $ Cdn $ Business Revenue $7,894,646 $8,131,486 $3,032,330 $3,123,300 $3,799,899 $3,913,896 $1,405,293 $1,447,451 Personal Income 3,782,656 3,896,135 2,094,703 2,157,544 1,877,761 1,934,093 622,412 641,085 • Direct 726,283 748,072 378,968 390,337 484,116 498,640 163,789 168,703 • Re-Spending/ Local Consumption 2,468,927 2,542,995 1,278,750 1,317,113 1,058,956 1,090,725 367,057 378,069 • Indirect 587,445 605,069 436,985 450,094 334,688 344,728 91,566 94,313 Local Purchases 1,133,209 1,167,206 772,802 795,986 637,553 656,680 175,955 181,234 Federal Taxes 680,878 701,304 377,047 388,358 337,997 348,137 112,034 115,395 State & Local Taxes 359,352 370,133 203,186 209,282 182,143 187,607 67,073 69,085 ILLNOIS MINNESOTA NEW YORK PENNSYLVANIA (1,000) US $ Cdn $ US $ Cdn $ US $ Cdn $ US $ Cdn $ Business Revenue $438,795 $451,959 $1,343,705 $1,384,016 $167,397 $172,419 $53,650 $55,260 Personal Income 594,196 612,022 439,576 452,763 173,708 178,919 65,948 67,926 • Direct 121,942 125,600 115,464 118,928 49,646 51,136 12,568 12,945 • Re-Spending/ Local Consumption 384,763 396,306 263,731 271,643 109,291 112,570 42,718 43,999 • Indirect 87,490 90,115 60,381 62,193 14,770 15,213 10,662 10,982 Local Purchases 152,694 157,275 114,433 117,866 34,070 35,092 19,426 20,009 Federal Taxes 106,955 110,164 79,124 81,497 31,267 32,205 11,871 12,227 State & Local Taxes 59,420 61,202 46,815 48,219 21,019 21,649 6,661 6,861 “Great Lakes shipping is vital to our nation’s economy, as well as our future sustainability. Our state’s ports handle millions of tons of steel, grain, ethanol, wind energy equipment, coal and construction materials, which is why Indiana ranks 14th among all states in waterborne shipping.” Rich Cooper, CEO, Ports of Indiana “The value of U.S.-flag Lakes shipping has never before been so well illustrated. These facts and figures will help us fight for our fair share of federal dredging dollars, a second Poe-sized lock at Sault Ste. Marie, Michigan, renewal and expansion of the U.S. Coast Guard’s icebreaking fleet and other needs that will determine if those jobs stay and grow, or whither and go.” James Weakley, President Lake Carriers’ Association “This report validates what the association has long contended—that the Great Lakes/Seaway navigation system is vital to the continued prosperity of the region. A multitude of jobs—on land and at sea—work together to help ensure that goods and services are enjoyed by a vast customer base.” Steven Fisher, Executive Director American Great Lakes Ports Association “Ohio ports are a critical gateway for cargoes transported via the Seaway between the international marketplace and the North American heartland. This study underscores the importance of maritime transport to our economy and the need for federal policies that properly sustain our marine highways.” Will Friedman, President and CEO Cleveland-Cuyahoga County Port Authority Following the June presentation, several key decisions were made by the study sponsors that would impact the economic benefits presented in the final report: • Only those economic impacts associated with trade between Duluth-Superior and Montreal, within the territorial boundaries of the Great Lakes/St. Lawrence Seaway, would be included in the final report’s results—the inclusion of ports and terminals east of Montreal produced significantly greater impacts principally due to container trade at the Port of Montreal. • 2010 trade data would be used in the analysis even though it represented one of the worst navigation seasons in history. • Related user jobs—those jobs that are economically less dependent than those that create direct, induced and indirect impacts— would not be included in the overall benefit totals. E C O N O M I C I M P A C T • The results would be illustrated at both the system-wide level as well as through breakdowns by country, state, province, waterway segment, cargo type and fleet type—regardless of how insignificant the results might appear. The sponsors also decided to report detailed data sets for system-wide benefits by country, state, province, commodity and job categories and include separate chapters on the economic benefits by flag of carriage (U.S., Canadian and foreign), waterway segment (St. Lawrence Seaway) and related user jobs. In addition, the study results and methodology were peer reviewed by three recognized U.S. and Canadian economists prior to publication. The review ensures that the methodology used by Martin Associates in calculating the benefits was conceptually sound and comprehensive. Martin Associates responded in writing to all peer review comments to the satisfaction of all three reviewers. A look at the results. On October 18, the final results of the new economic impact study were released in press conferences led by each country’s transportation department. The overall message at those conferences was clear—Great Lakes/Seaway system commerce generates tremendous economic benefits to the citizens of the United States and Canada. “This report bears out what we’ve long known—that the Great Lakes/Seaway system is crucial to the U.S. and Canadian economies,” said U.S. Transportation Secretary Ray LaHood on the day the study’s results were released. “Not only is marine transportation the single most fuelefficient and cost-effective way to haul goods from one place to another, but it also supports hundreds of thousands of essential jobs and generates billions of dollars in economic activity.” For example, more than 226,000 goodpaying jobs are dependent upon commercial maritime activity in the system, including 93,000 direct jobs. The movement of iron ore, which represents the largest tonnage handled at the ports and maritime terminals, created the largest number of direct jobs—37,200. The majority of these jobs are with shippers/consignees (steel mills) located at the ports that are directly dependent upon the receipt of iron ore by vessels. About 17,000 of these direct jobs are with mills located in Canada and about 12,000 are with U.S. steel mills. Other system-wide benefits identified include: • $33.6 billion (C$34.6 billion) in business revenue from transportation firms. 12 www.greatlakes-seawayreview.com “This report bears out what we’ve long known—that the St. Lawrence Seaway is crucial to the U.S. economy. Not only is marine transportation the single most fuel-efficient and cost-effective way to haul goods from one place to another, but it also supports hundreds of thousands of jobs and generates billions of dollars in economic activity.” Ray LaHood, Secretary, U.S. Department of Transportation “Canada and the United States share a mandate to protect our waters from invasive species while facilitating safe and clean marine transportation. This study underscores the importance of an internationally compatible approach to managing ballast water discharges in the waters we share with the United States.” Pierre Poilievre, Parliamentary Secretary to the Minister of Transport, Infrastructure and Communities, Federal Economic Development Agency for Southern Ontario E C O N O M I C I M P A C T DOCK SITE 100th St. and Calumet River, Chicago, IL 60617 Tel: (773) 375-3700 • FAX: (773) 375-3153 • E-mail: kramert@kochind.com Coal Blending STOCKPILING Transloading The most modern, innovative and customer-oriented transfer terminal in mid-continent North America will save you time and money in the movement, storage and transfer of your dry bulk cargo. With ease and dispatch. Worry free. KCBX will receive your cargo from rail cars, trucks and river barges. We will transfer it to any land or water mode or store it for you. We are ideally positioned to blend Western, Eastern and Illinois Basin coals as well as petroleum coke prior to transloading product to lake vessel, ocean vessel or river barge. We utilize our high speed bottom dump car unloading station or by blending from ground storage while dumping a single commodity from rail cars. Our portable material handling equipment can also provide customized on-site blending and stockpiling services at our 46 acre facility. We offer remarkably quick barge turn-around. If you are moving the products we most usually handle—steam coal, petroleum coke, metallurgical coal, taconite pellets or any other dry bulk commodity—call Tom Kramer’s marketing office at (773) 933-5302. Let us show you how it’s done best! GREAT LAKES/SEAWAY REVIEW October-December, 2011 13 E C O N O M I C I M P A C T DIRECT 92,923 DIRECT 37,220 DIRECT 48,660 DIRECT 7,043 INDUCED 66,005 INDUCED 35,772 INDUCED 24,189 INDUCED 6,044 INDIRECT 67,905 INDIRECT 34,621 INDIRECT 28,719 INDIRECT 4,566 0 50,000 100,000 150,000 200,000 250,000 Total United States Canada Foreign TOTAL 17,653 TOTAL 101,568 TOTAL 107,612 TOTAL 226,833 IMPACT ON JOBS BY FLAG OF CARRIAGE BY REGION 0 2 4 6 8 10 12 14 16 Federal Taxes $ Billions State/Provincial & Local Taxes Local Purchases Personal Income Business Revenue . United States . Canada . Foreign FINANCIAL IMPACT BY FLAG OF CARRIAGE BY REGION UNITED STATES CANADA FOREIGN TOTAL (1,000) US $ Cdn $ US $ Cdn $ US $ Cdn $ US $ Cdn $ Business Revenue $15,537,600 $16,003,728 $15,678,458 $16,148,812 $2,344,974 $2,415,323 $33,561,032 $34,567,863 Personal Income 7,866,158 8,102,143 4,884,354 5,030,885 1,363,714 1,404,626 14,114,227 14,537,654 • Direct 1,696,677 1,747,577 2,288,326 2,356,976 377,983 389,322 4,362,985 4,493,875 • Re-Spending/ Local Consumption 4,750,354 4,892,864 1,309,804 1,349,098 793,025 816,815 6,853,182 7,058,777 • Indirect 1,419,128 1,461,702 1,286,225 1,324,811 192,707 198,488 2,898,060 2,985,002 Local Purchases 2,685,125 2,765,679 3,323,626 3,423,335 404,992 417,142 6,413,744 6,606,156 Federal Taxes 1,445,719 1,489,090 1,343,664 1,383,974 263,470 271,374 3,052,853 3,144,439 State/Provincial & Local Taxes 763,841 786,757 617,015 635,525 149,777 154,271 1,530,634 1,576,553 ………. ………… ……………. ………………………………………………………………………………………………………………………………………. …………………………………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………………………………………………………. ………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………………………………. ………………………………………………………………………………………………………. …………………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………………. ……………………………………………. ……………………………………………….. ………………………………………………………………………………………………………………………… ………………………………………………………………………… ……………………………………………………………………………….. 14 www.greatlakes-seawayreview.com Our latest vessel repowering featuring the most advanced technology and environmental protection available • 41% reduction in fuel consumption • Corresponding reduction in GHG Emissions • 46% reduction in SOx emissions • 33% reduction in NOx emissions And generator package • Fourth vessel to be repowered since the Year 2000 • Shaft alternators • Economizers • Water lubricated stern bearings • Full automation • Increased annual carrying capacity due to improved performance Setting A Course for the Future! LOWER LAKES TOWING LTD. LOWER LAKES TRANSPORTATION COMPANY P.O. Box 1149, 517 Main Street, Port Dover, Ontario N0A 1N0 Telephone 519-583-0982 Fax 519-583-1946 lowerlakes@kwic.com GREAT LAKES/SEAWAY REVIEW October-December, 2011 15 0 100,000 200,000 300,000 400,000 500,000 Total United States Canada TOTAL 84,331 TOTAL 393,262 TOTAL 477,593 0 10 20 30 40 50 60 70 80 90 State/Provincial & Local Taxes Federal Taxes Personal Income Business Revenue $ Billions . United States . Canada RELATED USER IMPACT ON JOBS RELATED USER FINANCIAL IMPACT UNITED STATES CANADA TOTAL (1,000) US $ Cdn $ US $ Cdn $ US $ Cdn $ Business Revenue $83,906,441 $86,423,634 $31,608,507 $32,556,763 $115,514,949 $118,980,397 Personal Income 18,179,620 18,725,008 4,552,340 4,688,910 22,731,960 23,413,919 Federal Taxes 3,272,332 3,370,501 1,382,022 1,423,482 4,654,353 4,793,984 State/Provincial & Local Taxes 1,853,928 1,909,546 543,053 559,345 2,396,981 2,468,891 “This study unequivocally demonstrates the importance of the marine industry and its contribution to the economy of the Great Lakes region, in terms of jobs, revenue and international trade opportunities. Having made significant investments in this vital trade corridor and having great interest in the future prosperity of the region as both employers and residents, we are very pleased with the results of this initiative.” Mark Pathy, Executive Vice-President, Fednav Limited “I am excited to have our new Economic Impact Study. Our waterways provide critical infrastructure for our transportation system. Qualifying our impact with jobs and related revenue provides us with evidence of what we have long known—the value of our ports in relation to our local economy. We have a highway to the world with little infrastructure related cost!” John Jamian, Executive Director, Detroit/Wayne County Port Authority “The results of the study are clear and unequivocal—the Great Lakes/St. Lawrence Seaway system is critical to the economies of Ontario and Quebec, as well as the multitude of communities along the waterway which are served. In the case of Windsor, marine transportation is responsible for the creation of almost 1,000 jobs and generates over $130 million in economic activity—this represents one of the major industries in our region and one which is critical to our economic growth and vitality.” David Cree, President & CEO, Windsor Port Authority E C O N O M I C I M P A C T • $14.1 billion (C$14.5 billion) in wages and salaries (personal income). • $6.4 billion (C$6.6 billion) in local purchases. • $3.1 billion (C$3.1 billion) in U.S. and Canadian federal taxes paid. • $1.5 billion (C$1.6 billion) in state/ provincial/local taxes paid. Of the 226,000 direct, induced and indirect jobs created by maritime activity throughout the system, cargo moving on the Canadian-flag fleet supported nearly 102,000 jobs, while cargo moving on the U.S.-flag fleet supported nearly 108,000 jobs. The balance was supported by cargo moving on foreign-flag vessels. In terms of business revenues, cargo moving on U.S.- flag vessels supported $7.9 billion (C$8.1 billion), cargo moving on Canadian-flag vessels supported $4.9 billion (C$5.1 billion) and cargo moving on foreign-flag vessels supported $1.4 billion (C$1.4 billion). The study concluded that iron ore moving on U.S.- and Canadian-flag vessels creates the majority of the direct impacts, while the carriage of steel imports on foreign-flag vessels created the largest impact for cargo moving internationally. The study also reported that more than 86,000 U.S. and Canadian jobs and $12.3 billion (C$12.7 billion) in business revenues were in some way related to the cargo moving via the St. Lawrence Seaway to and from system ports and marine terminals. The study found that the level of jobs associated with Seaway traffic is significantly greater in Canada than in the United States, reflecting the location of alumina smelters, steel mills and steel fabrication facilities at Canadian ports—many of which are dependent on Seaway commerce. As noted earlier, related user jobs were intentionally not included in the overall benefit totals. These jobs are related to shippers/ consignees and supporting industries that move cargo through the system, but can and, do in most cases, use other transportation modes and/or routes. It is a common approach in economic analysis to add these jobs to the dependent job totals. However, the study sponsors decided to show these related user jobs, which total an additional 478,000 U.S. and Canadian jobs, as a supplemental non-additive benefit in a separate chapter of the final report. Including New York focus. The report also included a separate chapter detailing the impacts of maritime commerce that traverses New York waters. This chapter clearly details the likely losses to the U.S. and Canadian economies should the proposed New York State Department of Environmental Conservation (NYDEC) ballast water regulations take effect in August 2013. These regulations are the most stringent in North America and the topic of considerable 16 www.greatlakes-seawayreview.com “I am very impressed that Martin Associates was able to get such a high response rate (83 percent) from the firms that they interviewed. The location-specific data provided by phone interviews coupled with Martin Associates’ knowledge of the maritime industry enhance the accuracy of these results.” Bruce L. Jaffee, Professor and Executive Director, Institute for International Business Kelly School of Business, Indiana University “Based on the evidence presented to me in this study and my prior experience serving as Principal Investigator for a university economic impact study I completed for UW-Superior in 2008, as well as my examination of scores of other impact studies during the course of my tenure as Professor of Economics at the University of Wisconsin-Superior, I would conclude that this study was completed in a professional and detailed manner, and I support its methods and findings as carried out by Martin Associates.” Robert D. Beam, Professor Emeritus of Economics, University of Wisconsin-Superior “My overall assessment is that the analysis was very thorough and extensive.” John Lawson, President and Principal, Lawson Economics Research Inc. “We are hopeful that recent scientific evidence and today’s economic numbers will convince New York to rethink its legislation and work with industry and U.S. and Canadian governments to come up with harmonized, science-based regulations that will protect the environment and the economy.” Greg Wight, Chief Executive, Algoma Central Corporation “It is not surprising that more than 28,000 jobs are created by Ohio seaports on the Great Lakes. These jobs are a direct link to cargo moving to and from Ohio on the Great Lakes/St. Lawrence Seaway system. This data, along with the receipt of our 12th Robert J. Lewis Pacesetter Award from the Saint Lawrence Seaway Development Corporation for growth in international cargo during a single season, is a testament to the strong economic impact of the Port of Toledo.” Joe Cappel, Director of Cargo Development, Toledo-Lucas County Port Authority “With this study in hand, we can now demonstrate just how significant a role the Port of Hamilton plays in our provincial economy. We are clearly a strong economic driver, responsible for thousands of direct and indirect jobs. With over $200 million in recent investments, our rapidly growing port is well positioned to continue to contribute to Ontario’s prosperity.” Bruce Wood, President & CEO, Hamilton Port Authority controversy. The maritime industry believes the regulations to be unworkable and, if left unchanged, will result in economic harm should they come into effect. For example, more than 72,000 jobs in Canada and the United States are in some way dependent upon the handling of more than 47 million metric tons of cargo moved through New York waters. The implementation of the NYDEC rules will have an immediate and irreversible effect on those jobs and the associated wages totaling $3.8 billion (C$3.9 billion). In addition, $10.5 billion (C$10.8 billion) in business revenues and $1.4 billion (C$1.5 billion) in federal, state, provincial and local taxes are generated each year from this cargo movement. Within several days of the report’s release, there was favorable coverage of the study’s results from more than 100 different U.S. and Canadian print, radio and television outlets. More coverage is expected from monthly and quarterly transportation and shipping magazines and journals. Most of the initial reporting was focused on the system-wide benefits and the potential New York regulation impacts. The results of the new economic impact study, which provides accurate and comprehensive data, will serve many purposes for the stakeholder community in the years to come.Nearly every U.S. and Canadian public official representing the Great Lakes region has received a copy of the report. In addition, several industry executives have used the study results as the theme for recent speeches and presentations. The study will help to educate the general public and inform the many public policy debates at all levels of government surrounding maritime commerce on the Great Lakes/Seaway system. The obvious question is, “What’s next?” The success of the economic impact study in providing new and credible data bodes well for future “foundational” studies to fill in more data gaps. Maritime industry officials expect to produce these additional studies in the near future to supplement the new economic data. A copy of the full economic impact study report, as well as many other facts and figures on the importance and value of the system’s marine transportation, can be found at www.marinedelivers.com. . E C O N O M I C I M P A C T E C O N O M I C O U T L O O K GREAT LAKES/SEAWAY REVIEW October-December, 2011 17 earthquake in Japan. Since then, oil prices have substantially lowered and production appears to have recovered. These suggest a somewhat improved performance in the second half of 2011. Employment losses that began in February 2008 continued to mount after the end of the recession, declining until February 2010. The economy began adding jobs in March 2010, but the number of jobs added is just under 2.1 million—around 24 percent of the 8.7 million jobs lost. Besides regaining these lost jobs, the U.S. economy needs to be generating jobs each year for the new entrants into the labor force. During the past decade, the labor force in the U.S. economy increased by an average of 1.3 million each year, according to the U.S. Bureau of Labor Statistics. Thus, nearly five million workers have been added since the start of the recession. All of these factors are reflected in the high unemployment rate, which stood at 9.1 percent in September 2011. The slack in production, labor markets and other parts of the economy have kept inflation low. Inflation, as measured by the personal consumption expenditures (PCE) deflator, was 1.3 percent in 2010. However, following the unrest in the Middle East, oil prices rose more than 20 percent to $110 per barrel in April 2011. Largely as a result of this jump, inflation increased to an annualized rate of 3.2 percent during the first half of 2011. Oil prices have pulled back, falling to $86 per barrel in September 2011. Core inflation, which removes more volatile food and energy prices, is more reflective of the underlying slack in the U.S. economy and remained a year-overyear rate of 1.6 percent in August 2011. The weakest sector of the economy remained housing. Housing starts averaged 590,000 units (annualized rate) through the first nine months of 2011, well below the nearly 1.4 million annual housing starts that the U.S. averaged during the 1990s. The manufacturing sector, whose level of production fell by more than 20 percent during the Great Recession, has been increasing its pace of production rapidly. From June 2009 through September 2011, manufacturing output growth has averaged an annualized rate of 6.3 percent, recovering more than 57 percent of the loss experienced during the downturn. The two industries that fell by the largest percentage— automotive manufacturing and primary metals—have shown the strongest growth since the end of the recession, with annualized growth rates of 28 percent and 18.8 percent, respectively. Light vehicle sales (car and light truck sales) improved from 10.4 million in 2009 to 11.6 million in 2010—a nearly 12 percent gain. The annualized selling rate for light vehicles rose to 13 million units seasonally adjusted annual rate (SAAR) in the first quarter of 2011 from 12.3 million units SAAR in the previous quarter. However, the March 11, 2011 Japanese earthquake, tsunami and the subsequent nuclear disaster affected production facilities, especially those for automotive manufacturing, globally. Due in part to supply shortages, higher gasoline and vehicle prices, light vehicle sales fell to 12.1 million units SAAR in the second quarter. However with improving supplies and lower gasoline prices, light vehicle sales improved to 13 million units SAAR in September. Manufacturing output in the U.S. expanded by 7.9 percent SAAR in the first quarter and, following the Japanese disaster increased by just 0.4 percent SAAR in the second quarter. Motor vehicle and parts experienced a change of -15.7 percent SAAR in the first and second quarters. Industrial production rebounded in the third quarter by 4.5 percent SAAR. Many of these key underlying trends are likely to persist through 2012. While the financial head

Maritime Editorial