Vol.44 No.3 JAN‑MAR 2016

V O L U M E 4 4 J A N U A R Y – M A R C H 2 0 1 6 N U M B E R 3 G LGREAT LAKER Twinning the Poe Lock . A sustainable shipping system . The 2015 Season . 19th Century ship traps Interlake Steamship The Interlake Steamship Company 7300 Engle Road Middleburg Heights, Ohio 44130 Phone: 440-260-6900 • 800-327-3855 FAX: 440-260-6945 Email: boconnor@interlake-steamship.com Website: www.interlakesteamship.com LEADERSHIP Interlake Steamship’s legacy of leadership on the Great Lakes is a result of more than a century of superior customer service. Interlake continues to build its legacy by ensuring that its vessels are efficient and reliable. Preventive maintenance, upgrades, and attention to environmental stewardship keep the nine-vessel fleet in top shape. Responsive marketing and innovative engineering prevent delays and maintain a high level of readiness and efficiency. With individual vessel capacities ranging from 24,800 to 68,000 gross tons, Interlake can provide targeted solutions to customers’ requirements. Great Lakes transportation is our business, our only business. Let us deliver for you. Great Lakes Fleet GREAT LAKES/SEAWAY REVIEW January-March, 2016 1 Pere Marquette Shipping Marine Pollution Control 2 www.greatlakes-seawayreview.com THE INTERNATIONAL MARITIME MAGAZINE OF THE GREAT LAKES/ST. LAWRENCE SEAWAY SYSTEM VOLUME 44 JANUARY-MARCH 2016 NUMBER 3 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 Cris Shankleton Creative 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 Senior Account Manager Patricia A. Rumpler Account Manager Ellen Trimper 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; Dale Bergeron, Associate Professor, Minnesota Sea Grant; David Bolduc, Executive Director, Green Marine; Stephen Brooks, President, Chamber of Marine Commerce; Joe Cappel, Vice President of Business Development, Toledo-Lucas County Port Authority; Steven A. Fisher, Executive Director, American Great Lakes Ports Association; Tim Heney, Chief Executive Officer, Thunder Bay Port Authority; Anthony G. Ianello, Executive Director, Illinois Inter-national Port District; Peter Kakela, Ph.D., Professor, Department of Community, Agriculture, Recreation and Resource Studies, Michigan State University; Kevin McMonagle, Vice President-Operations, American Steamship Company; Allister Paterson, President, Canada Steamship Lines; Mark Pathy, President and Co-CEO, Fednav Limited; Wayne Smith, Senior Vice- President, Commercial, Algoma Central Corporation; Joseph P. Starck, Jr., President, Great Lakes Shipyard; James H.I. Weakley, President, Lake Carriers’ Association; Wendy Zatylny, President, Association of Canadian Port Authorities. 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. One year print & digital edition $38. Foreign: One year $47.00; two years $68.00; three years $100.00. One year print & digital edition $53. 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 V O L U M E 4 4 J A N Twinning the Poe Lock . A Sustainable Sh U A R Y – M A R C H 2 0 1 6 hipping System . The 2015 Season . 19th N U M B E R 3 h Century ship traps G GRE L EAT LAKER LGR ship traps 19th Century challe face f Great enges ble p formida orts b t Lakes 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. © 2016 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: Project cargo helped augment the 2015 season. Photo by Robert Welton. Great Laker Cover: An underwater view at Thunder Bay Marine Sanctuary. Inland. S Sea. Solut tions. M www.MarinePollu +1 (313) 84 Marine MPC IS OSRO #003 utionControl.com 49-2333 – 24/hour Pollution Control Combining the economy of Great Lakes shipping with flexibility for cargoes not suitable for traditional self-unloaders, the tug barge PERE MARQUETTE 41 offers a level of dependable service that translates into outstanding value. Let us help you evaluate how our new articulated tug barge system can benefit your company. Self-loading/unloading: hydraulic crane with grapple, clamshell or magnet; conveyor unloading places material approximately 80′ from side of ship Stone, logs, pig iron, scrap metal, coils, slabs and over-dimensional pieces Conveyor unload materials up to 15 inch Articulated tug barge coupler technology U.S.- flag Great Lakes service PERE MARQUETTE SHIPPING COMPANY 701 Maritime Drive P.O. Box 708 Ludington, MI 49431 (231) 845-7846 Fax (231) 843-5383 www.pmship.com INTO YOUR IS OUR BUSINESS BARGING BUSINESS GREAT LAKES/SEAWAY REVIEW January-March, 2016 3 The international maritime magazine of the Great Lakes/St. Lawrence Seaway system Federal study documents the need for redundancy of Poe Lock. Page 9. Expectations for the 2016 season are reserved. Page 26. Exposing trouble spots or ship traps. Page 64. A R T I C L E S Maritime Heritage 19TH CENTURY SHIP TRAPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Exposing trouble spots in the Great Lakes. System History GREAT LAKES PORTS FACE FORMIDABLE CHALLENGES . . . . . . . . . . . . . . . . . . 68 Special regional problems face Lake ports as the Seaway enters its second decade. Meet the Crew ‘A SOLUTIONIST’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Captain Jeff Stabler brings global experience, can-do attitude to Cleveland. Locks TWINNING THE POE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 U.S. Department of Homeland Security study documents the need for redundancy of Poe Lock. Fleets STRAIGHT TALK BY DOMESTIC FLEETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ‘Only the strong will survive: sustaining the Great Lakes system for decades to come.’ The 2015 Season 2016 OUTLOOK RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Conservative expectations due to lackluster 2015 bulk movements. PORTS UP CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 International downturns impact 2015 season, infrastructure investment continues. Interview ALWAYS READY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Ninth District Commander addresses hot topics and her personal philosophy on leadership. Maritime Strategy OUTLINING A WAY FORWARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 New bi-national maritime strategy provides a structure for decisions to come. Technology CYBER STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 U.S. Coast Guard establishes plans for handling technological advances and cyber threats. Dredging BUDGETS TREND UP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 U.S. Army Corps of Engineers receives 2017 funding, 2016 additions for Great Lakes. Technology UNMANNED SHIPS? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Technological innovations raise questions about the future of how ships will operate. Ports MODERNIZING INFRASTRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Port of Algoma makes major investments to capture new markets. Interview MAKING A BIG MOVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 After 18 years, Ron Johnson moves on from Trade Development Director in Duluth. GREAT LAKER J A N U A RY- M A R C H 2 0 1 6 Great Lakes/St. Lawrence Seaway D E P A R T M E N T S Dateline: Great Lakes/St. Lawrence Seaway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Administrator’s Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Guest Editorial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Great Lakes Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 On The Radar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 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 Between issues of Great Lakes/Seaway Review, stay current with our free weekly news service, Digital Dateline, at www.greatlakes-seawayreview.com/digdateline/ The Great Lakes Seaway Partnership I am m Great La akes Sea way Ship pping… Jerry Ache Each ye 30 years in t Great Lakes Superintende enbach he industry Maritime Academy ent Transitio career i on fresh only one the Grea cadets o Achenb h water at Lak pa kno the The Marine i a career “ rt of a vital industry.” owing they will be an inte e success of the students e best part of the job is s egral s and seeing Gre supp eat Lakes-Seaw porting 227,000 way shipping dr 0 jobs in the Un ives economic ited States and growth, d Canada. To learn more about the Gre Follow us on Twitter @GLSPartn eat Lakes Seaway shipping industr nership ry, visit www.greatlakesseaway.o rg. GREAT LAKES/SEAWAY REVIEW January-March, 2016 5 Seaway tolls increase, new incentive introduced The St. Lawrence Seaway Management Corporation (SLSMC) has increased tolls by 2 percent for the 2016 navigation season. It also introduced a new Gateway Incentive Program to support the system’s competitiveness with other modes of transportation. The Gateway Incentive offers a 20 percent discount on cargo tolls for any commodity, origin or destination combination approved by the SLSMC as new business. The incentive is expected to draw cargo movements from other modes and is subject to a volume commitment, providing shippers with incentive to use the Great Lakes/St. Lawrence Seaway system, according to Bruce Hodgson, Director of Market Development for the SLSMC. “It’s different from the New Business Incentive because it is performance- based,” he added, noting the discount is given after the cargo is delivered rather than upon the ships entering the Seaway system. The application must be submitted prior to commodity movement. Developing the incentive has taken over a year. The concept originated from stakeholder brainstorming during a Hwy H2O member meeting. For additional details on the revised tariff, new incentive and continuing incentive programs, please go to http://www.greatlakesseaway. com/seaway_handbook/ seaway-handbook-en/web_schedule_ tolls.pdf. . U.S. House pushes for more FY17 funding In mid-March, 122 members of the House submitted a letter to the Appropriations Committee requesting $1.263 billion be provided to fund the U.S. Army Corps of Engineer Civil Works program for FY17. The letter is a call to maintain funding at FY16 levels. Sending the letter was prompted by an unexpected turn of events. While FY16 funding is in line with the increased use of the Harbor Maintenance Trust Fund (HMTF) as outlined in the Water Resources Reform and Development Act (WRRDA) of 2014, the amount collected most recently has decreased and would lessen the amount appropriated for FY17. The President’s budget estimated the HMTF will be about $1.662 billion for FY16, down $225 million from expected. While the target use of HMTF is 69 percent in FY16 and 71 percent in FY17, the amount appropriated based on the percentage would decrease by $122 million. “Congress, through WRRDA, committed to achieve full use of the HMTF through incremental increases over a 10-year period,” the letter states. “It is with this spirit that we write to request that the House Appropriations Committee maintain at least level funding and allocate $1.263 billion again for the Corps’ harbor maintenance activities in the House FY17 Energy and Water Development and Related Agencies appropriations bill.” For more information on Corps funding, please turn to page 53.. 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 DATELINE Winter work brings 14 lakers to Fincantieri Bay Shipbuilding Over the winter, Fincantieri Bay Shipbuilding (FBS) had 14 vessels from the Great Lakes fleet under repair and inspection in Sturgeon Bay, Wisconsin. The vessels ranged in size from 1,000- foot bulkers to medium-sized ships to tugs and barges. The scope of repairs varied from repowering and structural steel renewal to generator replacement and ABS and U.S. Coast Guard inspections. “These vessels need to return to work when the ice breaks around mid-to-late March, so there is a great deal of planning and scheduling that goes into meeting each ship’s critical deadline,” said Fincantieri Marine Group President and CEO Francesco Valente. “We employ all of our assets—expansive facilities, computeraided manufacturing equipment, heavy-lift capabilities, engineering expertise and the industry’s finest master craftsmen—to make it happen.” In addition to winter work, FBS delivered the articulated tugbarge (ATB) Leigh Ann Moran/Mississippi to Moran Towing Corporation in late 2015. The duo was the second ATB delivered to Moran last year. A third unit is scheduled for delivery in the first half of 2016. Moran Towing is affiliated with Interlake Steamship Company, which is having exhaust scrubbers installed at FBS on several vessels. . Early in his tenure as Minister of Transport, Marc Garneau is on the verge of shaping new transportation policy. The Canada Transport Act (CTA) Review Report is being assessed by his office and is available to the public. Launched June 25, 2014 and completed December 21, 2015, Garneau is seeking comments from the industry and others on its findings. Chapter 10 of the review deals with marine shipping in general and more specifically, with short sea shipping, pilotage, ports, Coast Guard operations and other marine systems, according to Stephen Brooks, Chamber of Marine Commerce President, noting the chamber is carefully reviewing the massive document. Final contents of the CTA are expected to align with Prime Minister Justin Trudeau’s transportation priorities as outlined in the Minister of Transport Mandate Letter as: • Developing an infrastructure strategy for investment in public and green transportation infrastructure • Assisting with delivering the newly-focused Building Canada Fund, an infrastructure investment fund • Proposing measures for reinforcing railway safety • Leading a full review of the CTA, including the Canadian grain transportation system • Working to improve marine safety • Reassessing the previous government’s changes to the Fisheries and Navigable Waters Protections Acts, restoring lost protections and incorporating modern safeguards • Formalizing a moratorium on crude oil tanker traffic on British Columbia’s north coast Specifically, the CTA recommends the government maintain a user-pay approach and review all marine fees on a regular basis; work with the provinces to improve cost competitiveness by ensuring payments in lieu of municipal taxes for port authorities are not greater than those of comparable industries; reform and strengthen the Canadian Coast Guard delivery model; strengthen the viability, accountability and competitiveness of marine ports; act to increase the competitiveness of Canadian shipping, including short sea shipping; and immediately address changes to pilotage. To view the full report, please go to http:// www.tc.gc.ca/eng/ctareview2014/canadatransportation- act-review.html. . Report for Canada Transportation Act available for public review Andrie 6 www.greatlakes-seawayreview.com D A T E L I N E being credited for there being no new invasive species discovered in the system for 10 years. According to the Great Lakes Ballast Water Working Group’s 2015 Summary of Great Lakes/Seaway Ballast Water Management activities, 100 percent of vessels bound for the system from outside the Exclusive Economic Zone received ballast management exams on each Seaway transit. In total, 8,361 ballast tanks were assessed during 455 vessel transits. Independent research by Fisheries and Oceans Canada indicates the risk of a ballast water introduction of aquatic invasive species into the Great Lakes has been mitigated to extremely low levels. To review the report on the bi-national results, please go to http://www.uscgnews.com/ clients/4007/695198.pdf. . 2016 spring breakout less severe Unlike the difficult season openings of 2014 and 2015, the spring break-out this year was minimal. According to Rear Adm. June Ryan, Commander of the Ninth Coast Guard District, the 2015 season required 9,234 hours of fleet work to clear the waterways in partnership with the Canadian Coast Guard. When the system closed in December, there was no ice coverage. What built up through the winter became the focus of icebreaking campaigns by the U.S. and Canadian coast guards. The bi-national crews launched Operation Coal Shovel in the southern Great Lakes January 29. Operation Coal Shovel includes domestic icebreaking operations in southern Lake Huron, Lake St. Clair, the St. Clair/Detroit River system, Lake Erie, Lake Ontario and the St. Lawrence Seaway. To the north, Operation Taconite, which covers icebreaking in Lakes Superior and Michigan, the St. Marys River and the Straits of Mackinac, began two weeks earlier, on January 13. When ice cover was about 84.5 percent of the Great Lakes in late February 2015, it was at 12.9 percent this year, according to the National Oceanic and Atmospheric Administration-Great Lakes Environmental Research Laboratory. . Robert Lewis-Manning leaves CSA In February, Robert Lewis- Manning began working as President of the Chamber of Shipping of British Columbia. The former President of Canadian Shipowners Association (CSA) replaces Stephen Brown, who retired from the post. Lewis-Manning served as President of CSA, based in Ottawa, since 2010 and was a member of the Great Lakes/Seaway Review Editorial Advisory Board. According to the Chamber of Shipping, his recent legal challenge with the U.S. ballast water management legislation demon- Bi-national agreement stalls court case on ballast water regulations An agreement between the Canadian Shipowners Association (CSA) and the U.S. Environmental Protection Agency (EPA) on a motion staying all deadlines in the EPA’s ballast water rule has been approved in court. The motion impacts terms applying to ballast water treatment deadlines for 2012, 2014 and new vessels until the end of the current Vessel General Permit 2013-17 (VGP), December 19, 2018. By then, the EPA must have the 2018-22 VGP in place. CSA challenged EPA’s 2013-17 VGP in court. In October, the U.S. Court of Appeals for the 2nd Circuit ordered the EPA to re-evaluate its regulation and named six contested actions. While the U.S.-flag fleet is currently exempt from installing ballast water treatment systems, the Canadian-flag fleet is not exempted. With the legal stays in place, the Canadian-flag fleet continues to look for solutions. International vessels using the Great Lakes/St. Lawrence Seaway system continue to flush their ballast tanks before entering the system, a practice Robert Lewis- Manning SHIP ASSISTS • TOWING CREW BOAT SERVICES • ICE BREAKING SPECIAL PROJECTS ASPHALT & FUEL OIL TRANSPORTATION VESSEL & FLEET MANAGEMENT PROJECT MANAGEMENT 561 E. Western Ave. Muskegon, MI 49442 TUGS • BARGES • JACK-UP BARGES • CREW BOAT • CRANES Call Stan Andrie at (231) 332-9227 or Mike Caliendo at (231) 332-9243 www.andrietg.com Duluth Seaway Port Authority REGIONAL CALENDAR GREAT LAKES/SEAWAY REVIEW January-March, 2016 7 REGIONAL CALENDAR D A T E L I N E strated his strength and ability in facilitation and advocacy for the shipping industry at all levels of government. The Chamber of Shipping represents Canada’s maritime industry on the West Coast. Lewis- Manning will work with a board of directors to continue organizational governance, determine policy direction and provide industry oversight. A new President for CSA has not been named. . Algoma Central receives favorable outcome in Mingde Shipyard arbitration Algoma Central Corporation has received payments totaling $53.4 million from refunded guarantees related to the cancellation of three shipbuilding contracts. The payments came as a result of a positive outcome to its arbitration with Nantong Mingde Heavy Industries Stock Co. Ltd. A London Arbitration Tribunal found in favor of Algoma on a dispute involving three shipbuilding contracts let out for its Equinox vessels. “The collection process proceeded smoothly once the shipyard and its representatives ceased to pursue their arbitration of our cancellation of the contracts,” said Peter Winkley, Algoma’s Vice President and CFO, noting the funds intended for these ships will be redirected towards investment in replacement fleet renewal contracts announced in recent months. Algoma entered into contracts in 2010 to build eight Equinox Class dry-bulk carriers in China. Only three vessels were completed and Algoma took steps to cancel the contracts and collect a refund of the related construction installments. Algoma then entered into new contracts with shipyards in Croatia and in China for the construction of five new full sized Equinox Class vessels. Deliveries are scheduled for 2018. . Hwy H2O rolls out new website To better show the Great Lakes/St. Lawrence Seaway system as “shipping simplified,” Hwy H2O has improved its website at www.hwyh2o.com. The site has a new look and additional interactivity, including direct access to incentive programs operated by The St. Lawrence Seaway Management Corporation, a calculator in the Shipping Centre for calculating tolls, routes, scheduled services and incentives for specific shipments and real-time information about port partners and members. . 16-19 Association for Iron and Steel Technology Conference Pittsburg, Pennsylvania www.aist.org/conference-expositions/ aistech 23-26 Breakbulk Europe 2016 Antwerp, Belgium Joanna Lenck, (973) 220-4827 events@breakbulk.com www.breakbulk.com 25-26 23rd Annual International Symposium on the St. Lawrence/Great Lakes Ecosystems—St. Lawrence River Institute of Environmental Sciences Cornwall, Ontario riverinstitute.ca/river-symposium/ program-speakers/ 30- GreenTech 2016 June 1 Hilton Quebec Quebec City, Quebec www.green-marine.org/greentech/ APRIL 24-26 Great Lakes Economic Forum Delta Toronto Hotel, Toronto, Ontario www.greatlakeseconomicforum.com MAY 1-4 50th Annual Canadian Transportation Research Forum Conference DoubleTree by Hilton, Toronto, Ontario www.ctrf.ca 218.727.8525 | duluthport.com Serving the Heartland of North America Yes, we deliver. Whatever your project cargo needs, let us do the heavy lifting. Streamline your supply chain. Use us as your storage & distribution center to ship inland or overseas. Avoid congestion and delivery delays. Make the Port of Duluth your cargo hub. By water, road and rail … we deliver. Ports of Indiana at Lake Michigan and Ohio 1,000 Acr of Multimodal Industrial Sites ts res River Por are Available L O C K S GREAT LAKES/SEAWAY REVIEW January-March, 2016 9 LOCK OPERATIONS: To see an animated demonstration of how the locks work, please go to http://www.lre.usace.army.mil/Missions/Recreation/SooLocksVisitorCenter/SooLocksAnimation.aspx. TWINNING THE POE U.S. Department of Homeland Security study documents the need for redundancy of Poe Lock The Congressional push for investment in a second Poe-sized lock in Sault Ste. Marie, Michigan is about more than commerce. The U.S. Department of Homeland Security (DHS) has released results from a study connecting the locks to national security. The study, called The Perils of Efficiency: An Analysis of an Unexpected Closure of the Poe Lock and Its Impact, was conducted by the DHS Office of Cyber and Infrastructure Analysis (OCIA). The results are a culmination of interviews and analysis on what commodities move through the lock, how they’re used and the impact of an unanticipated closure of the Poe Lock. The interviews involved company representatives from rail, iron ore, docks, steel mills, automobile manufacturing, limestone quarries, federal and state governments and more. Modeling was used in determining the impact of an unexpected six-month closure. “Our analysis showed that a failure of this supply chain for an extended period of time would have a devastating impact in the North American economy,” said Dr. Craig Gordon, Program Manager for Capability Development, Modeling and Crisis Action for the OCIA. The report went on to state: “An unanticipated closure of the Poe Lock would likely result in widespread bankruptcies and dislocations throughout the economy. 227,000 JOBS $33.5 billion ANNUAL BUSINESS REVENUE $14.1 billion ANNUAL PERSONAL INCOME $4.6 billion ANNUAL TAX REVENUE By the Numbers GREAT LAKES SHIPPING CREATES: Van Enkevort Tug & Barge L O C K S 10 www.greatlakes-seawayreview.com Over 10 million people in the United States and two-to-five million more in Canada and Mexico would lose their jobs and the North American economies would enter a severe recession. The recession impacts would be concentrated in the Great Lakes region, though California and Texas would experience some of the largest job losses. Entire manufacturing industries would be debilitated, including: automobiles, appliances, construction, farming and mining equipment, and railcars and locomotives.” For reasons noted by the study, the Soo Locks have been referred to as “a lynch pin” and the “Achilles heel” of the Great Lakes Navigation System by the U.S. Army Corps of Engineers. The Corps is tasked with maintaining the locks, which vessels pass through for a 21-foot drop in the St. Marys River between lakes Superior and Huron. “Our analysis suggests that the Poe Lock should be considered the Achilles heel of the North American industrial economy,” Gordon said. “If the Poe Lock were to close for a six-month period of time, the impact to the U.S. would be about 11 million job losses and the loss to the GDP would $1.1 trillion—or about 6 percent of the economic output.” Closure scenario. The OCIA’s sixmonth closure scenario in the study is based on reasonable assumptions on actual impacts of an unexpected closure of the Poe Lock. The scenario begins in March with the Corps unable to reopen the Poe Lock for the start of the shipping season. SEEKING MARINE PROFESSIONALS MATES, ENGINEERS AND AB’s / DECKHANDS Van Enkevort Tug & Barge, Inc. 909 N. Lincoln Rd. • Escanaba, MI 49829 (906) 786-1717 Days • Fax: (906) 786-1700 vtbarge@vtbarge.com GREAT LAKES | BULK SELF-UNLOADING IRON ORE | STONE | COAL Any Type Dry Cargo Bulk Commodity March » The Corps announces the Poe Lock will not open March 25 as expected. Mechanical problems force an extended closure. » At least 78 percent of the mining capacity shutters immediately. April » Steel mills located along the southern portion of the Great Lakes begin running out of iron ore. The least profitable plants shut down first, with others to follow. May » Automobile manufacturing plants begin shutting down because they lack the steel needed to produce parts for continued production. » Plants producing appliances and farm, construction and mining equipment curtail operations by mid-month. » Layoffs accompany the shutdowns, spanning the Midwest and extending to California and Texas. September » The locks reopen at the end of the month. » Steel mills begin working through system inspections and start-up procedures. » With only three months until winter shutdown, mills must rebuild their stock of iron ore before waterways close to the freighters. Decisions on restarting mills are pending. December » Steel production resumes mid-month if restocking has reached a level where the plants can resume operations for the winter without additional iron ore deliveries. It takes 10-12 weeks to build up a plant’s iron ore supply. The next April » Automobile production likely resumes, with the companies facing a loss in production of 16 to 18 million automobiles, based on the industry’s annual production totals. Six-Month Closure Scenario Download a copy of the complete report at http://www.lcaships.com/wp-content/uploads/2016/03/OCIA-The-Perils-of-Efficiency-An-Analysisof- an-Unexpected-Closure-of-the-Poe-Lock-and-Its-Impact1.pdf. Detroit/Wayne County Port Authority The scenario of a six-month closure of the Poe Lock creates a more extended impact than anticipated. “There’s a 13-month period of time between the first impact and a normal automobile production process,” Gordon said, noting that an unanticipated closure of the Poe Lock would shut down about 75 percent of the U.S. integrated steel production within two-to-six weeks of the lock’s closure, about 80 percent of the iron ore mining operations and nearly 100 percent of North American appliances, automobile, construction equipment, farm equipment, mining equipment and railcar production. “Anyone who cares about jobs in the Great Lakes region and in our nation should be concerned with the Soo Locks,” said Jim Weakley, Lake Carriers’ Association (LCA) President, who participated with Gordon on a webinar where the study’s results were shared with members of the Great Lakes Legislative Caucus. “We literally connect mining with manufacturing and form the basis of tens of millions of jobs in the United States. Millions more jobs in Mexico and Canada are dependent on the Soo Locks.” In the study’s summary, Gordon shares quotes from three unnamed companies based on the expected impacts to their companies if the scenario happened. An executive from the automobile industry said: “The loss of the integrated mill steel supply for 180 days would be catastrophic to the North American automobile industry, including its tier one suppliers. There is no contingency plan, stockpile or offshore sourcing action that could come close to mitigating the situation.” L O C K S GREAT LAKES/SEAWAY REVIEW January-March, 2016 11 1968 1986 2004 2007 2009 2014 2015 Poe Lock Timeline THE CURRENT POE LOCK IS CONSTRUCTED. Second lock authorized at dimensions equivalent to the Poe. Based on flawed assumptions, benefitcost ratio is calculated at 0.73, with a score of 1.0 needed to receive funding. Second Poe-sized lock authorized at full federal expense. Preparatory work for the new lock begins. Corps conducts a “sensitivity study” to determine if a new benefit-cost analysis would reach 1.0. U.S. Department of Homeland Security prepares a report on the impact of an unscheduled shutdown of the Poe. The Corps launches an Economic Reevaluation Report, funded at $1.3 million with a timeline of about two years to complete. The Corps begins a Major Rehabilitation Report process to evaluate the current condition of the Soo Locks. DETROIT/WAYNE COUNTY PORT AUTHORITY PROMOTING TRADE AND ECONOMIC GROWTH 130 E. Atwater, Detroit, Michigan 48226 Phone: (313) 259-5091 Fax: (313) 259-5093 www.portdetroit.com • Located on the border of United States and Canada. • Seaport related services • Remediation of Brownfield sites • Global transportation system. • Worldwide direct-water port terminals with complete cargo handling and stevedoring services. • Financing tools for improving infrastructure repair and development. • Public/private partnerships which create awareness for the maritime industry, job creation and economic growth. SOURCE: U.S. ARMY CORPS OF ENGINEERS Fednav DEPENDABLE | F EPE MT | FALLine | Fednav D END irect | DABLE www.fednav.com A second company representative said: “The firm does not have long-term contingency plans for a disruption in normal steel supply. We have limited ability to purchase small amounts of some types of steel on the open market, but would be unlikely to support full production of all required parts for even a single product line.” According to Gordon, the results of a six-month shutdown of the Poe Lock would have far greater impact than the economic recession of 2009. During the recession, two automobile manufacturers requested a government bailout when production levels dropped to about 9 million cars annually. Under the closure scenario, there would be nine months when steel-based automobile products would have nearly zero production because of its requirement for specialized steel produced at the U.S. mills. “One company said it made 475 kinds of steel for one car company,” Gordon said. “Three steel companies combined make about 1,500 different types of steel for the auto industry.” An actual closure. July 29, 2015, the upstream gates in the MacArthur Lock were not closing properly. The lock was shut down and dewatered for repairs. The unexpected outage lasted 20 days. The lock closure forced traffic—commercial and recreational—to transit through the Poe Lock, causing delays in delivering L O C K S GREAT LAKES/SEAWAY REVIEW January-March, 2016 13 1.9 million tons of cargo aboard U.S.-flag vessels, according to the LCA. Ships slowed while in transit toward the lock, their crew aware of the backlog of ships waiting to get through. During that time, the Poe Lock experienced a one-hour unscheduled outage. If the outages were reversed and the Poe Lock was down for 20 days, 32 U.S.-flag, Poe-restricted vessels would have been trapped above or below the locks. Threequarters of all integrated steel production could cease within two-to-six weeks, idling automobile, heavy equipment and appliance manufacturing. “The impacts would have been amplified 100 times,” said Glen Nekvasil, LCA Vice President. As it was, about 140 ships were delayed for 260 hours—an interruption costing the shipping industry $800,000. “We fully understand how this unscheduled outage of nearly three weeks affected the shipping community,” said Mike O’Bryan, Great Lakes Navigation Business Line Manager for the Corps. “Our crews worked as quickly as possible to accurately assess the problem and conduct repairs in a safe manner. The significant delays that the shipping community experienced underscore the importance of both the MacArthur and Poe locks to the shipping and manufacturing industries. It is more important than ever that we do all we can to ensure the reliability of both locks into the future.” Malfunctions in the hydraulic systems were the No. 1 cause of the recent outages, according to Dave Wright, Detroit Operations Chief for the Corps. While making repairs, experts discovered new vulnerabilities in anchorages embedded in concrete at the locks. Deteriorating metal was found by xraying the concrete. Some repairs needed exceed the normal winter maintenance timeframe and others may require warmer temperatures—outages which would impact the shipping season. As a result of the aging infrastructure, the Corps is spending more for maintenance and having to respond to more unscheduled outages. Two major efforts are underway to improve reliability in the Soo: 1) Maintaining the existing infrastructure through an Asset Renewal Plan and 2) Conducting a study on whether constructing a new Poe-sized lock would pass an updated benefit-cost analysis by the Corps. Pushing through the deadlock. Congress has authorized construction of a new Poe-sized lock in the Soo and full federal funding for the project. To date, money has been invested in engineering, deepening part of the channel and constructing coffer dams to hold the water back as the new lock is constructed where two smaller, disabled Indiana and Michigan would face jobs losses in excess of 22% Ohio, Kentucky and Tenessee in excess of 15% California, Illinois, New York and Texas in excess of 500,000 jobs United States, 11 million jobs lost Ontario, Canada would face losses in excess of 20% Unemployment Impacts From the Poe Lock Closure Scenario The results of a six-month shutdown of the Poe Lock would have far greater impact than the economic recession of 2009. Mexico and Canada, an additional 1-5 million jobs lost SOURCE: THE PERILS OF EFFICIENCY: AN ANALYSIS OF AN UNEXPECTED CLOSURE OF THE POE LOCK AND ITS IMPACT KCBX Terminals 14 www.greatlakes-seawayreview.com locks are located. However, the Corps’ internal procedure to create a ratio to prioritize projects within its budget has stalled the process. According to Steve Check, Project Manager for the Soo Lock project for the Corps, $18.7 million has been spent on the design and construction of the coffer dams and L O C K S Mechanical problems increasing at the Soo Locks While the Soo Locks in Sault Ste. Marie, Michigan consists of four locks, only two are operational. The Poe Lock is the largest of the two locks at 1,200 feet long and 110 feet wide. It was built in 1968 and serves as the only lock able to transport the U.S.- flag fleet’s 1,000-footers. The smaller MacArthur Lock was built in 1943 and, at 800 feet long, is used to move smaller freighters. According the U.S. Army Corps of Engineers: • 50 percent of the Great Lakes coastal structures were built before World War II and more than 80 percent of these structures exceed 50 years of age. • 45 percent have never undergone significant updating because of funding constraints. • The Soo Locks once had major lock replacements every 19 years. Two such cycles have been missed since the last major replacement. • The Soo Locks are used to move 57 million tons of commerce annually and just a 30-day outage would have a negative economic impact of $160 million, the greatest economic impact of any national lock structure. According to the Corps, 70 percent of the commercial commodities moving through the Soo Locks are restricted to the Poe because of the size of the vessels transporting the cargo. In addition, 97 percent of the iron ore mined in the United States is mined in Minnesota and Michigan and must use the locks to reach steel mills in the southern Great Lakes, said Dave Wright, Detroit Operations Chief for the Corps. 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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! LEFT: The current Soo Locks with the Davis and Sabin locks, which are no longer active. RIGHT: This rendering shows the Soo Locks once a new Poe-sized lock is constructed where the Sabin and Davis locks are currently. Ports Toronto GREAT LAKES/SEAWAY REVIEW January-March, 2016 15 downstream channel deepening. “There is more downstream deepening that needs to occur but that task will be part of the approach wall contract that is still in the design phase,” he said. The Corps uses the benefit-cost analysis to prioritize funding its projects. With an overall score of 0.73, twinning the Poe Lock is on hold. While the OCIA study calls for a redundant way to move iron ore to the steel mills, the Corps has categorized construction of the lock as unfundable. “While there are people in the Corps who support funding the lock, there are others who struggle with how to deal with a project that doesn’t have an alternate means of transportation,” Weakley said. “They’ve never faced this scenario before.” The metrics used to determine the ratio restrict impact of closures to direct impacts. Using 9/11 as an example, Weakley said that if the bombing of the Twin Towers was analyzed with this approach, the impact of the damage done to the two buildings is all that could be considered. In 2013, Michigan Senator Carl Levin and Representative Dan Benishek held a meeting at the Soo with shipping representatives and the Corps to discuss moving construction forward. In 2014, a bi-partisan group of 11 legislators wrote to Jo-Ellen Darcy, Assistant Secretary of the Corps, calling for action. “Given how critical this project is for the nation’s manufacturing and infrastructure, we hope you will appropriately prioritize this project,” the letter said. “Relying on a single lock at the Soo is a major risk to the nation’s manufacturing base and other critical infrastructure. For that reason, Members of Congress worked to ensure that a new replacement Poe-sized lock would be built at the Soo by including a provision in the Water Resources Development Act of 2007 authorizing the Corps to build the new lock with full federal funding.” On November 10, 2015, Michigan Senators Wayne Schmidt and Tom Casperson offered a resolution urging the President L O C K S As a result of the aging infrastructure, the Corps is spending more for maintenance and having to respond to more unscheduled outages. Wartsila Taconite Harbor Silver Bay Duluth Chicago Burns Harbor Detroit Toledo Cleveland Toronto Nanticoke Windsor Lorain Marquette Escanaba Two Harbors Calumet Gary Indiana Harbor Hamilton Superior L O C K S 16 www.greatlakes-seawayreview.com and U.S. Congress to support plans to upgrade the Soo Locks and approve the Corps’ request to fund an Economic Reevalution Report (ERR). While the ERR is moving forward, it could be 18 months before the results are known and a next step determined. “Upgrades to the Soo Locks are needed to ensure national security and unfettered commerce through the Great Lakes,” the resolution states. Earlier this year, Michigan Governor Rick Snyder called for twinning the Poe Lock in his January State of the State address and the Ohio House of Representatives passed a resolution urging the President, Congress and the Office of Management and Budget to support plans for the locks. House Resolution 263 was sponsored by Rep. Mike Dovilla (R) and cosponsored by 43 bipartisan members. It passed 93-0. The resolution refers to the DHS study, which estimates Ohio’s unemployment rate could reach 17.2 percent, 60 percent higher than the 2008-09 recession if the Poe Lock failed. “The next step is completing the ERR and getting a benefit-cost ratio that appropriately measures the value of the project,” Weakley said. “Then we’re home free. Sadly, it’s going to take two years to get the report and when it’s a two-year budget cycle, we’re optimistically looking four years away from getting started. We’re easily 15-plus years away from building in the redundancy that will secure the North American manufacturing base.” Finding DHS solutions. When completing the study, Gordon and his team wanted to look beyond the collected data to potential ways of solving the problem with having the Poe Lock act as a singlepoint- of-failure. Potential mitigation strategies include: • Constructing the second Poe-sized lock where the small Davis and Sabin locks are now located, although the close proximity of the locks does pose a concern in terms of security. Gordon noted that during World War II, the U.S. garrison had upwards of 20,000 troops protecting the locks Great Lakes Iron Ore Mines and Lakeside Steel Mills Integrated Steel Mill Iron Ore Mine Finding what you really need is only possible when you have the best marine offering on earth to choose from. Wärtsilä is the market leader …………………………………………………….. gas solutions and ensuring environmental compliance …………………………………………………….. Our global service network offers support when and where you need it. Read more at www.wartsila.com WÄRTSILÄ: YOUR SHORTER ROUTE WHAT YOU NEED WE DON’T OFFER WHAT WE HAVE BUT SOURCE: U.S. ARMY CORPS OF ENGINEERS American Great Lakes Ports Association L O C K S GREAT LAKES/SEAWAY REVIEW January-March, 2016 17 against German attack, with Canada providing protection on its side. • Developing an iron ore strategy stockpile in case the Poe is disabled. The significant pile would need to be located near the steel mills along lakes Erie and Michigan. • Expanding the Port of Escanaba and increasing rail capacity so it could move 10- 15 million tons of iron ore annually. • Developing a contingency for lightering ore through the MacArthur Lock, which could be combined with another option to move some of the required iron ore. • Partnering with the rail industry to alleviate congestion in the northern states and see if docks in Toledo, Pittsburg-Conneaut, Ashtabula and Cleveland could load and unload iron ore. The costs for the options vary. Gordon said he estimates twinning the Poe Lock to cost between $580 million, the Corps’ original estimation, and $1 billion. Upgrading the Port of Escanaba could cost another $1 billion. The railroad companies have estimated $5 billion to upgrade their infrastructure and capacity. Creating a stockpile of iron ore below the lock is a relatively inexpensive option, but difficult to accomplish based on the size of the stockpile required. Together, mitigation costs range from $3-5 billion. “When we started this analysis, it didn’t seem possible to us that there wasn’t an alternative strategy to get iron ore from Michigan and Minnesota to the Great Lakes steel mills,” Gordon said, noting they looked at rail and truck movements and even the possibility of importing steel— none of which would work without major investments. However, the outcome of the study is sure—there needs to be redundancy created to support the North American economy and U.S. national security. “We believe there are a series of strategies one could employ to mitigate this,” Gordon said. “The only reason we would have to suffer from a failure of the Soo Locks for an extended period of time is if we don’t take action.” Janenne Irene Pung . The Clipper Gemini takes her first trip through the Soo Locks. Advocacy. promoting public policies that foster maritime commerce on the Great Lakes-Seaway system for membership information visit: www.greatlakesports.org SLSMC Hwy H2O In an ever-changing economic environment, both the U.S. and Canadian fleets have undertaken unprecedented modernization projects and fleet renewal initiatives. What measures have the fleets taken to ensure that today’s waterborne assets will be viable 20 years from now? Barker: Because our ships only move in freshwater, we haven’t needed to invest in new ships. We perform steel replacement as needed, but our hulls are in good shape. While we haven’t built new assets, we have invested immensely in our assets. At Interlake Steamship Company, we’re on our fifth ship repowering and we’re installing scrubber systems, as well. We’ve replaced gensets (generators) and other equipment as part of a large fleet renewal. In addition, the U.S. domestic fleet is upgrading ships. We’ve also added to the fleet by building the 800-foot ATB (articulated tug-barge) Ken Boothe and Lakes Contender and the Great Lakes Trader. There’s a tendency for more tug-barge units. We’ve found it advantageous to create ATBs from older ships by removing the old stern and engine room and adding a tug. We need to continue to invest in these assets so we have assets for decades to come. Business ebbs and flows. Even though we are in a downturn now, our investment decisions are not based on what we see today, but what we expect for the future. Paterson: The Canadian fleet cargoes were down 18 percent last year, with a decrease of 33 percent in coal and iron ore. The decrease is partly due to Canada having some steel companies in protection and oil being $20 a barrel. ArcelorMittal lost 20-some percent of its business. The Baltic Dry Index is down 50 percent in two months and down 98 percent from the high in 2008. We are dealing with a very tricky domestic market right now. While we firmly F L E E T S GREAT LAKES/SEAWAY REVIEW January-March, 2016 19 STRAIGHT TALK by domestic fleets ‘Only the strong will survive: sustaining the Great Lakes system for decades to come’ When Great Lakes/Seaway system’s stakeholders come together, they do so to pursue individual success by creating a sustainable commercial shipping industry. The system-wide perspective mirrors the aphorism: “a rising tide lifts all boats.” The success of each company benefits the system. Growth of the commercial shipping industry benefits the regional economy. A thriving regional economy positively impacts jobs and a rising GDP in Canada and the United States. While commodity flows are changing and economies are challenged, the system is left to determine how it will thrive in the decades to come. During a panel discussion at the Great Lakes Waterways Conference, Paul LaMarre, III., Director of the Port of Monroe, served as moderator and posed straightforward questions to two industry panelists. “Each of us is here with a common goal—to sustain maritime trade,” LaMarre said. “While it’s only natural for us to tout the next-great thing in the system, I want to point out that 90 percent of the cargo at my docks is domestic. As we move forward, we need to realize that only the strong will survive. We need to ask ourselves what we need to do today to ensure a sustainable system 50 years from now.” The panelists answering LaMarre’s questions were Mark Barker, President of Interlake Steamship Company and Chair of the Lake Carriers’ Association and Allister Paterson, President of Canada Steamship Lines and Chair of the Canadian Shipowners Association. Barker represented the U.S.-flag fleet and Paterson the Canadian-flag fleet. The following are excerpts from the discussion. Paul LaMarre, III Director of Port of Monroe and panel discussion Moderator Mark Barker President of Interlake Steamship Company and Chair of the Lake Carriers’ Association Allister Paterson President of Canada Steamship Lines and Chair of the Canadian Shipowners Association Furuno believe we will come out of this, we are not seeing an expanding market. The uncertain regulatory environment is not a great environment for making investments. But even in the uncertain regulatory environment, one-third of the Canadian fleet is new or being built. It takes entrepreneurs and business owners with a lot of courage to invest in that type of atmosphere. We’re proud of the system for the investments being made. How do you project the fleets will have expanded or contracted 20 years from now? Paterson: The new ships we’ve built are more efficient. They’re faster and they carry more cargo. It would take five older ships to do what four of the newer ships can do. What will be right for the fleet in 20 years will be depend on innovation in attracting cargo and how well the industry sells itself. For example, we need to be better at explaining our value in moving bulk liquids. Our fleets will be determined by how well and how competitively we can move cargo and by what cargo we’re moving. Barker: We’re here to build a business. The fleet has contracted but, in some cases, ships have been replaced by new ones that can do more than an older ship could. Old assets may need to be replaced, but those decisions don’t always involve replacing ship for ship. There was a big reduction in the fleet in the 1980s when the 1,000- footers were built. Each one took the place of five older, smaller boats. Self-unloaders changed the game. Technology will change the fleet again. Do you anticipate the same commodities that have been the staple cargoes carried on the Great Lakes for the last 100 years to be the same in the future? Where do you see the primary areas for cargo growth and are your fleets ready for it? Barker: The largest stone queries are in Michigan. Iron ore will be around. Coal will play a role as it moves down its path. Intermodal transportation has been used on the Great Lakes for 100 years. We will always be part of the route. The next generation will need to address environmental regulations, infrastructure needs and how cargo will move in light of things like the trucking industry having a hard time getting drivers for long-hauls and how big companies are making shipping decisions based on their environmental footprint. We’re gaining momentum. It’s a F L E E T S 20 www.greatlakes-seawayreview.com Even though we are in a downturn now, our investment decisions are not based on what we see today, but what we expect for the future. Mark Barker, President, Interlake Steamship Company Port of Toledo slow change, but its coming. As the world looks at carbon emissions, we are positioned as an important part of the intermodal supply chain. Paterson: I don’t think all of the staples are going to come back to what they once were. Coal use is down in Canada. We’re always going to move salt for roads and aggregates and cement for construction, but I think there will be new cargoes coming. I expect them to be in breakbulk, which could provide challenges for the fleet because we’re so heavily invested in self-unloaders that move dry bulk. We may have to make adjustments to the fleet. What cargo trends could prompt abrupt diversions from your existing strategic plans? Paterson: Cargo trends will determine the decisions we make about what to build. I see non-dry-bulk cargo taking a greater role. Some of the members are getting into Arctic resupply and liquid bulk is a big opportunity for the industry with all of the talk of and concern with pipelines. F L E E T S GREAT LAKES/SEAWAY REVIEW January-March, 2016 21 Barker: If the government decides we’re not going to be a manufacturing country, we’re in trouble. But I don’t think it will happen because of the importance of manufacturing for national security. We’re starting to see glimpses of manufacturing coming back in the U.S. We will also be impacted by infrastructure, supply chain and congestion mitigation. It starts with moving what’s heavy. That’s what we do well. Then it will depend on how we play a role in logistics. If we need another lane on a highway, it costs $1 billion to build. Nobody questions that expense, but they don’t take into consideration the oil runoff, accident rates and other impacts of that road. What we do know is that the big box companies are starting to look at their logistics chain and make decisions differently than in the past. Our system represents the finest bi-national cooperation between two nations operating on a shared waterways system. What cooperative measures could be taken now to ensure we are as cooperative in the future? Barker: The 1909 treaty is in place because both countries realize the importance of our shared resource. Air emissions are regulated with that in mind. Ballast is handled in an opposite way. We need leadership on both sides working together. The way people are Shipping is the best way to move goods to lower carbon emissions so we need to make sure the legislature doesn’t displace us from that position. THE PORT OF TOLEDO +1 419 243 8251 toledoseaport.org Just Got Bigger! Now Open For Business! 180 ACRES ADDED TO THE PORT OF TOLEDO AT THE IRONVILLE SITE Water Your Cargo Here! Rail Pipeline Truck 180 More Reasons to …………………… of Toledo! Allister Paterson, President, Canada Steamship Lines The Great Lakes Towing Company THE GREAT LAKES TOWING COMPANY TOWING & SHIP ASSIST CARGO TRANSPORTATION, BARGING & LOGISTICS ICE BREAKING EMERGENCY ASSISTANCE CHARTERING A TUG YOU CAN DEPEND ON. IT’S GOOD SEAMANSHIP TO TAKE A TUG. SAFETY PAYS. 216-621-4854 • sales@thegreatlakesgroup.com • www.thegreatlakesgroup.com McKeil Marine writing the rules makes it difficult for the stakeholders to agree on domestic issues, and then you bring in the international community and further confuse issues because you’re talking about different movements. The mismatched regulations are upping the stakes, causing problems and starting to hamper growth. We need a commonsense approach, and we should be asking what role should the Saint Lawrence Seaway Development Corporation and The St. Lawrence Seaway Management Corporation play in making this happen. Paterson: Well, you all know I’m an airline guy. It would be crazy for an airline to have to meet different state and provincial regulations as they fly over. It wouldn’t work. The problem is—we’re not maritime nations and we should be. If we were in Europe, the Great Lakes/St. Lawrence Seaway system would be a godsend. But the way it’s viewed now creates jurisdictions that don’t work well. We have to get better at talking to the government about the transportation corridor and we need to get better at doing what we do. Since we’ve already talked about ballast water, what other current legislative initiatives do you feel could alter the course of our industry’s potential 20 years from now? Paterson: We’re a big fan of VIDA (S. 373 Vessel Incidental Discharge Act). We would love to see the Coast Guard be the endall with ballast water regulations. The regulations all add up to more costs—carbon pricing and everything else. Shipping is the best way to move goods to lower carbon emissions so we need to make sure the legislature doesn’t displace us from that position. Barker: We need to make sure elected officials understand what we do. We need champions or we’ll be forgotten in the big picture. Policies like Cap and Trade (a policy approach to controlling large amount of emissions from a group or source) and expanding marine sanctuaries are also concerns for us. With Cap and Trade, how do we make sure it’s fair when it comes? VIDA helps bring stability to our fleet because it recognizes there are two fleets on the Lakes and gives jurisdiction to one group on discharges. We are moving to zero discharge and our sewer discharge is cleaner than that of most municipal wastewater plants. Our audience in its entirety represents the broad cross-section of stakeholders that will sustain our industry now and in the future. What measures can our stakeholders take to ensure our fleet’s viability and, in turn, that of their own operation? Barker: As we look at new markets, we have to come together to think long-term, which will create long-term results. We have to be smart and responsible about what we do and how we do it. We are a piece of a supply chain and it’s important our customers know our essential role so they can go to bat with us on some issues. Getting shippers, carriers and receiving companies together is powerful because it provides the full picture for elected officials. When shippers step in, people in D.C. and Ottawa listen. Paterson: We have to find mechanisms more aligned and better heard. We need a bi-national vision to share. There’s nothing like facts and a strong voice. Janenne Irene Pung n In 1955, Evans McKeil saw an opportunity. Work on the St. Lawrence Seaway had begun, but boats were in short supply. So he and his father built the 40-foot Micmac and, for three seasons, they shuttled workers and supplies— day and night—to sites along the river. When work on the Seaway was complete, Evans formed McKeil Marine. For the past six decades, the company has grown, becoming one of the most respected names in the industry. McKeil’s ongoing dedication to its people and the community can be traced back to those early days. “My father’s spirit continues to guide and inspire me to serve a company that, at its core, is about caring and sharing,” said Blair McKeil, Chairman & CEO. McKeil’s newest vessel— named the Evans Spirit— honors the company’s roots of entrepreneurship, innovation, hard work and social responsibility. She joins the fleet’s flagship, the Evans McKeil, a hardworking tug playing a vital role in the company’s success for nearly 30 years. Join the McKeils in celebrating 60 ye

Maritime Editorial