Vol.46 No.4 APR‑JUN 2018

Soo Locks funding . Ohio’s maritime strategy . Passenger cruising . Canada reviews pilotage, ports Interlake Steamship Great Lakes Fleet Ket Lakes, Inc. Ports of Indiana Metro Ports Fleets DIVERSIFYING AND OPENING NEW DOORS……………………………………………………8 Interlake Steamship Company brings single-hold barge, partner tug into the system. Economic Development MAKING THE DEAL………………………………………………………………………………………..11 Cleveland-based port authority helps bring amazon.com to town. Dredging AN EXPANDING 2018 WORK PLAN…………………………………………………………………15 Preparing and planning for Great Lakes’ 2019 projects. Economic Development DEVISING A STRATEGY…………………………………………………………………………………..21 Ohio releases its first state maritime strategy. Shipbuilding & Ship Repair PERFECTING PAINT………………………………………………………………………………………..27 10-tug build leads to federal standard color update for Great Lakes Towing Company. Passenger Cruising DISCOVERING FRESHWATER SEAS…………………………………………………………………32 Momentum for regional cruising builds as vessel owners invest in right-sized ships. Passengers prioritize culture, class and safety. CULTURAL IMMERSION…………………………………………………………………………………37 Shore excursions drive regional passenger cruising success. Commodities IRON ORE EVOLVES………………………………………………………………………………………..47 Post WWII fear of depletion defeated. Shipbuilding & Ship Repair A RENAISSANCE……………………………………………………………………………………………..53 Port Weller Dry Docks operating under new management. Interview BALANCING INDUSTRY AND ENVIRONMENT……………………………………………….57 Marilyn Baxter talks about her role in advancing stewardship. Cleveland port authority helps draw two amazon.com distribution centers. Page 11. Momentum for regional passenger cruising is building. Page 32. D E P A R T M E N T S Dateline……………………………………………………………………………………………………………………..5 Guest Editorials…………………………………………………………………………………….19, 30, 45, 51 On the Radar……………………………………………………………………………………………………………72 Post WWII fear of iron ore depletion defeated. Page 47. G R E A T L A K E R AVAILABLE IN THESE FORMATS Legends A LEGACY OF LEADERSHIP……………………………………………………………………………62 Davis Helberg impacts shipping and its people through decades of contributions. Maritime Heritage MARGARET OLWILL FOUND………………………………………………………………………….64 After decades-long search, discovery of 19th-Century vessel confirmed. Shipbuilding History AN EMERGING RENAISSANCE………………………………………………………………………..66 Larger, faster vessels building a stronger, more efficient Great Lakes fleet. Meet the Crew STEADY AS SHE GOES…………………………………………………………………………………….69 Interlake’s Kraig Funkey continues to cultivate his Great Lakes career. Lighthouses RESTORING A LIGHT STATION………………………………………………………………………70 From maintenance to grand plans, volunteers help preserve Thunder Bay icon. PRINT DIGITAL MOBILE 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 Marine Pollution Control MPC OVERSIZED AND HEAVY Great Lakes/Seaway Review and Great Laker are .published quarterly. Postmaster: Send .address changes to Great Lakes/Seaway .Review, Great Laker, 221 Water Street, Boyne City, Michigan 49712 USA. © 2018 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: The Herbert C. Jackson eases through MacArthur Lock. Photo: Walter Barkley Great Laker Cover: Thunder Bay Island Light Station is restored. Photo: Ed Bansek Port Milwaukee BULK, BREAKBULK, LIQUID CARGO .. 16 day Europe to Milwaukee service with Fednav shipping line .. Year-round river barge service to the Gulf region .. Tramp liner service by Inducement .. Deck barge service throughout the Great Lakes .. Heavy lift capacity up to 187 metric tons with Stiff Leg Derrick crane .. Inside and outside storage availability .. Direct Union Pacific and Canadian Pacific railroad service .. All interstate highway routes to Illinois and Iowa for overdimensional cargo CONNECTING TO THE WORLD FOR MORE INFORMATION: Port Milwaukee 414-286-3511 milwaukee.gov/port GREAT LAKES/ST. LAWRENCE SEAWAY DATELINE State of Michigan, U.S. Army Corps boost Soo Locks funding In the recently released 2018 work plan for the U.S. Army Corps of Engineers, the Soo Locks is allotted $57.58 million for a major overhaul through the Navigation Construc.tion fund. In addition, the plan includes $15.82 million for repairs from the Operations & Maintenance budget. As a result, the total investment in lock rehabilitation is $73.40 million for 2018—compared to $9.6 million in 2017 and $14.6 million in 2016. To view de.tails of the final 2018 work plan please turn to page 16. In addition to federal spending, Michigan Governor Rick Snyder committed to investing $50 million for upgrading the Soo Locks. The State of Michigan has launched a new website highlighting the economic importance of the locks in Sault Ste. Marie and the urgent need for repairs. The website includes facts about the Soo Locks, a video message from Michi.gan’s Lt. Gov. Brian Calley and a page encour.aging readers to thank President Trump for his stated commitment to fixing the locks. “Advocating for bipartisan support to fund the rebuilding of the Soo Locks was a 2017 Mackinac To-Do List item,” said San.dy Baruah, President and CEO of the Detroit Regional Chamber. “We are pleased to see the Soo Locks getting national and state at.tention, as it is a vital source for trade and commerce across the country. We look for.ward to working with the Trump administra.tion, the Governor, Lieutenant Governor and Michigan’s congressional delegation on up.grading the infrastructure.” Adam Schlicht named Port Director in Milwaukee Milwaukee Mayor Tom Barrett has appointed Adam Schlicht as Municipal Port Director. Schlicht will direct operations at Port Milwaukee and administer For.eign Trade Zone No. 41. His ap.pointment has been approved by the Common Council. Since 2010, Schlicht has held positions at the Saint Lawrence Seaway Development Corporation (SLSDC), most recently head.ing up the SLSDC’s Great Lakes Regional Initiative in Cleveland, Ohio, focusing on foreign trade, maritime and economic devel.opment activities throughout the U.S. and Canada, including frequent work directly with Port Milwaukee. “The city relies on the port director to pro.mote commerce and support the local econo.my. At the same time, we count on Port Mil.waukee to operate efficiently and continue to return a dividend to the city’s general fund,” Mayor Barrett said. “Adam’s background and energy are ideally suited to this job, and I am confident he will continue the excellent work underway at the port.” Schlicht succeeds former Port Director Paul Vornholt, who was appointed to the mayor’s Chief of Staff in April.. Vanta Coda becomes Ports of Indiana CEO Vanta Coda has been named the Ports of Indiana’s Chief Executive Officer, re.placing Rich Cooper following his July 1 retirement. After 16 years with the Ports of Indiana, Cooper is finishing his career by assisting with the leadership transition through the end of the year. Most recently with the Duluth Seaway Port Authority, Coda returns to the Ohio Riv.er Valley with 25 years of experience in maritime and multimodal operations on the Great Lakes, Gulf of Mexico and Ohio River. While leading the Duluth, Minnesota or.ganization, he led the completion of $24 million in infrastructure renewal projects, opened the CN Duluth Intermodal Terminal and launched the Duluth Cargo Connect initiative. Coda has been actively involved with maritime policy initiatives for the Great Lakes at the state and federal levels in his roles as President of the Minnesota Ports Association, member of the board of di.rectors for the American Association of Port Authorities and member of the American Great Lakes Ports Association and U.S. DOT Maritime Transportation System National Advisory Committee.. Shippers again to pay hike for 2018 pilotage rates As part of its annual review of rates for pilotage services, the U.S. Coast Guard has increased the hourly rate for pilots by more than 12 percent. The 2018 increase follows a 14 percent hike in 2017—from $218 an hour to $601 an hour—which ignited a lawsuit and industry concerns for offering a sustainable business model. While the court supported most of the methodology used to calculate the increases to mirror Canadian pilot compensation, it did call into question an “ar.bitrary and capricious” 10 percent addition. According to the Federal Register, the new rates go into effect July 5, taking the hourly rate from $271 an hour to $653 an hour, depending on where the pilot is sailing. While the increase impacts the overall cost of doing business in the Great Lakes/Seaway system, it is expected to in.crease pay for about 49 pilots who work in three districts. For a complete breakdown of the methodology and officially submitted concerns, see the Public Register at www.federalregister.gov/documents/2018/06/05/2018-11969/great-lakes-pilotage-rates- 2018-annual-review-and-revisions-to-methodology.. House passes Water Resources Development Act The U.S. House of Representatives has approved the bipartisan Water Resources Development Act (WRDA) 2018 by a vote of 408 to 2. The legislation authorizes proposed U.S. Army Corps of Engineers civil works activities and provides reforms expected to shorten project timelines. The bill was introduced by committee Chairman Bill Shuster (R-PA), Transportation and In.frastructure Committee Ranking Member Peter DeFazio (D-OR), Water Resources and Environ.ment Subcommittee Chairman Garret Graves (R-LA) and Water Resources and Environment Subcommittee Ranking Member Grace Napolitano (D-CA). This marks the third time the committee has approved WRDA under Shuster’s leadership. “We have to refocus the Corps of Engineers on moving dirt instead of pushing paper,” said Graves. “This bill, together with the Disaster Reform and Recovery Act (H.R. 4) recently passed by the House, begins shifting from responsive bureaucratic delays to leaning forward, building projects, improving the resilience of our communities, improving our ports and navigation chan.nels and restoring our coastal ecosystems.” While passage is considered a win, DeFazio acknowledged the removal of a provision ensur.ing funds collected from the Harbor Maintenance Trust Fund be used only for harbor mainte.nance—and not for unrelated government spending.. CSL agrees to joint venture with SMT Shipping The CSL Group has entered into an agree.ment to acquire 50 percent of Eureka Ship.ping Ltd., SMT Shipping’s pneumatic cement vessel business. The transaction is expected to close shortly. “The joint venture represents an import.ant step in CSL’s strategy to increase its pres.ence in the global construction material sec.tor,” said Louis Martel, President and CEO of The CSL Group. “We are confident that the synergies between CSL and the Eureka team, along with our common values and comple.mentary skills, will further strengthen our ability to provide significant value to our cus.tomers and an effective platform for growth.” CSL’s Australian cement shipping busi.ness is not included in the move.. Lake Superior-based ballast water testing results first step in gathering information A study released by the Great Waters Re.search Collaborative (GWRC) provides an anal.ysis of aquatic invasive species found in ballast water discharged into western Lake Superior by U.S. and Canadian lakers. The Great Lakes Bal.last Monitoring Project Technical Report is a re.sult of the collaborative working with Lake Car.riers’ Association (LCA) and the Minnesota Pollution Control Agency. According to LCA, the study is a productive first step toward eventually establishing ballast management policy. More research is needed to: • Broaden the scope of testing. While up.take and discharge of ballast water were sam.pled, invasive species were not identified as alive or dead at uptake, nor was it determined if any that were alive survived the voyage and then survived discharge. • Expand the data set. GWRC’s sample data was limited to just a few months, between Au.gust and December of 2017. • Expand the data sample size. The re.search collected samples from just eight vessels, which took in ballast water from the lower four Great Lakes and discharged it into western Lake Superior as part of routine voyages. “Our work on this issue is urgent and ongo.ing, and with this report, we’ve taken a step for.ward in the right direction,” said James Weak.ley, President of Lake Carriers’ Association. “I think everyone will agree we share a common goal—to work together to construct a solid sci.entific foundation upon which we can build sound practices for non-native species manage.ment in the Great Lakes.” The full report, which was funded by the U.S. EPA’s Great Lakes Restoration Initiative via the U.S. Maritime Administration, can be accessed here: www.uwsuper.edu/lsri/publi. cations/upload/LSRI-GWRC-TR-GLSBM-1_FINALv2_31May2018.pdf.. Paul LaMarre III named Marine Historical Society of Detroit Historian of the Year Paul C. LaMarre III was named 2018 Historian of the Year by the Marine Historical Society of De.troit. The annual award is given for significant accomplishments in advancing maritime history and preservation. “There are a lot of things that went into choosing Paul LaMarre, but the most important was that he saved the Schoonmaker,” said Roger LeLievre, Marine Historical Society of Detroit President. LaMarre, Director of the Port of Monroe, is widely credited as being the driving force be.hind the restoration of the 1911-built laker Col. James M. Schoonmaker at Toledo, Ohio. Without his efforts, LeLievre said, the vessel would likely have been scrapped. LaMarre is a board member of the Great Lakes Historical Society’s National Museum of the Great Lakes and the Great Lakes Shipwreck Historical Society. He is also a long-time mem.ber of the Marine Historical Society of Detroit and serves on the group’s advisory council. LaMarre’s father, Paul C. LaMarre Jr., a re.spected Great Lakes maritime artist, received the same award in 2001.. Ballast Water Working Group releases 2017 summary report The Great Lakes St. Lawrence Seaway Bal.last Water Working Group (BWWG) has re.leased its most recent summary report, which found that 100 percent of ocean-going vessels bound for the Great Lakes/Seaway from out.side the Exclusive Economic Zone underwent ballast water management examinations be.fore entering the system. The BWWG is made up of representatives from the U.S. Coast Guard, the U.S. Saint Law.rence Seaway Development Corporation, Trans.port Canada and The St. Lawrence Seaway Management Corporation. The binational group’s mandate is to develop, enhance and co.ordinate binational inspection, compliance and enforcement efforts to reduce the introduction of aquatic invasive species via ballast water into the Great Lakes/St. Lawrence Seaway system. Throughout the year: • 8,350 ballast water tanks were assessed during 457 ocean vessel transits • 99 percent of all ballast tanks were in compliance with pre-established salinity levels • 100 percent of required ballast water re.porting forms were screened • No non-compliant ballast water was dis- charged in the system This is the ninth consecutive year the agencies report examining 100 percent of the ballast tanks entering the Seaway. The group anticipates continued high vessel compliance throughout the 2018 season.. Government of Canada invests in Port of Montreal The government of Canada is committing C$18.4 million to the Port of Montreal to opti.mize its rail network capacity, particularly in the port’s interchange zone. The work will include relocating underground and above-ground in.frastructure, relocating and constructing new road and rail lines to improve the flow of rail traffic and enhance the port’s competitiveness. The port is partnering with the Québec Minis.try of Transportation on the project.. Fednav receives new Lakes-friendly bulkers Federal Nagara is one of two lakers recently delivered to Fednav. The two bulkers, the other being Federal Dart, are 34,500-DWT box-hold, ocean carriers built at Oshima, Japan. The older handy-sized Federal Maas was sold and delivered to new owners earlier this year. Vanta Coda Adam Schlicht DATELINE Andrie Inc. Paul LaMarre III DATELINE REGIONAL CALENDAR REGIONAL CALENDAR JULY 25-27 AAPA Port Security Seminar & Expo Double Tree by Hilton Chicago Magnificent Mile Chicago, Illinois www.aapa-ports.org AUGUST 15-17 Ohio Conference on Freight Hilton Cincinnati Netherland Plaza, Cincinnati, Ohio www.ohiofreight.org 28-30 Midwest Specialty Grains Conference & Trade Show Sheraton Kansas City at Crown Center Kansas City, Missouri www.grainconference.org SEPTEMBER 10-13 Association of Canadian Port Authorities Annual Conference Delta Hotel by Marriot Saint John Saint John, New Brunswick www.acpa2018.ca 11-12 AAPA Energy & Environment Seminar Hyatt Regency, Jersey City, New Jersey www.aapa-ports.org 25-27 BWMTech North America Bahia Mar Fort Lauderdale Beach Fort Lauderdale, Florida maritime.knect365.com/bwmtech-north-america/ OCTOBER 2-4 Breakbulk Americas George R. Brown Convention Center Houston, Texas www.breakbulk.com NOVEMBER 13-15 Hwy H2O Conference 2018 Hilton Toronto Airport Hotel, Toronto, Ontario www.hwyh2o-conferences.com 14-15 Shipping 2030 North America Intercontinental Times Square, New York, New York maritime.knect365.com/shipping2030-northamerica/ 14-15 Green Ship Technology North America Intercontinental Times Square, New York, New York maritime.knect365.com/green-ship-tech-na/ Duluth Seaway Port Authority FLEETS A Quick Look The beginning • Competitive pricing Diversifying and opening new doors Interlake Steamship Company brings single-hold barge, partner tug into the system Breakbulk. Synthetic gypsum. Steel coils and slabs. Proj.ect cargo. These commodities are being targeted by The Interlake Steamship Company as it brings a traditional barge and tug, Montville and Alice Moran, into the Great Lakes/St. Lawrence Seaway system. The duo is opening new doors for the largest U.S.-flag carrier in the region. “We’re seeing an increasing need for moving other types of cargo than the free-flowing bulk cargoes that we have traditional.ly moved,” said Mark Barker, Interlake President. “We felt it was important to respond and fulfill the needs of our customers.” The needs have been communicated in two ways. Customers and noncustomers have approached Interlake in search of eco.nomical ways to move cargo on the water, stressing a desire to avoid increasing backups and delays on land. The carrier also paid attention to what contracts it wasn’t winning and why. “We’ve become such a just-in-time society that we need to be able to tell our customers how we can meet their needs,” said Brendan O’Connor, Interlake Vice President of Marketing and Marine Traffic. “We just weren’t designed for the project cargoes I’ve bid on in the past, finished and unfinished. Now I have an as.set that’s designed for them. The customers like this flexibility.” In addition to diversifying cargo, the barge’s size allows it to deliver anywhere in the system. While Interlake primarily serves customers in the four Great Lakes west of the Welland Canal, Montville could be modified to meet contract obligations beyond those locks. Breakbulk movements requiring a covered hull are common along the river and Lake Ontario. The beginning. Through Interlake Logistics Solution, the company is time chartering the barge and tug from Moran Tow.ing, an affiliate Barker and Tregurtha company. After three weeks of sailing, the pair unloaded mill scale at the Port of Tole.do in May. She brought the flaky, hot-rolled steel in from Charleston, South Carolina—a perfect example of how the 418-foot barge’s single-hold, covered hopper brings possibilities. “The barge’s size lends itself to carry cargo most other barges cannot carry,” O’Connor said. Montville is pulled behind Alice Moran, a 4,300 horsepower, twin-screw tug. She has a 14,400 short ton capacity, the largest U.S.-flag barge of its kind operating in the system. The large cargo hold creates opportunities to move cargo, such as windmill com.ponents, heavy equipment and large structural components. “While barge service is available in the region, we believe the Montville is a unique asset,” O’Connor said. “Its sheer size and versatility sets it apart. With its large, open cargo hold—that is completely covered—it will be able to carry high cubic cargoes, as well as heavy cargoes protected from the environment.” The mill scale and other cargo are currently being offloaded using shoreside equipment—a method set to change as the Montville settles into the system. Plans call for installing a rail-mounted gantry and excavator at the fore-end of the barge. The crane will have a large material handler capable of digging or lifting cargo from the barge to the shore. The rail system will allow it to move the length of the hold. In addition to the crane, Interlake is planning to install a bal.last system. Currently, the barge has only small trim tanks. A bow thruster will also be added to help with maneuvering. Interlake’s crew is working alongside the Moran crew, being trained on how to operate a tug with a pull-behind barge. Until this season, Interlake’s barge experience involved sailing the ar.ticulated tug-barge Dorothy Ann-Pathfinder. The 700-foot self-un.loading unit operates more like a traditional laker because of the notch system. She was created by converting the former straight.deck bulk carrier J.L. Mauthe into a barge and pairing her with the Z-drive tug in 1999. Moran was formed in 1860 as a towing brokerage. It has grown and transitioned over the years, providing merchant ma.rine services in both World War I and II. In 1994, Paul Tregurtha and James Barker purchased Moran from Thomas Moran. Tregurtha became Chairman of the Board and Chief Executive Officer and continues in that capacity. Bark.er is Vice Chairman of the Board for Moran. His son, Mark Bark.er, now leads Interlake as President, which carries about 20 mil.lion tons annually through the Great Lakes. Today, Moran Towing operates at 17 ports along the U.S. East and Gulf coasts and in Puerto Rico. It owns and operates 95 tugs and 30 barges, according to the company website. Competitive pricing. Having the assets built and available is a key to jumpstarting the 2018 fleet plan. Although bringing in Montville is a significant investment, it saves Interlake time and money that would have been spent in the shipyard before the service could begin. It allows the company to spend the season testing its new trade. “The economics of this tug and barge is what makes it work,” he said. “It exceeds what other U.S.-flag barges can provide to.day. If we’re going to carry 14,500 tons and someone else is go.ing to carry 5,500 tons, we can now move twice of what can be done in the U.S. Jones Act market.” The current season is a trial, a beginning. The diversification strategy could build, leading to more time charters with Moran. The company is hauling test cargoes and working with a varied group of customers to develop the business and allow it to best serve the supply chain. As the season progresses, Interlake will haul, evaluate and determine when the time is right to pull the barge into the ship.yard for work on the loading and ballast systems. While deliver.ies are available with shoreside equipment, she will sail.  Janenne Irene Pung n FLEETS Montville is pulled behind Alice Moran, a 4,300 horsepower, twin-screw tug. She has a 14,400 short ton capacity, the largest U.S.-flag barge of its kind operating in the system. VESSEL SPECIFICATIONS Montville Unmanned Oceangoing, single-hold dry bulk barge Double hull ConstructionBollinger Marine Fabricators DeliveredMay 5, 2006 Gross international tons7,153 Net international tons3,691 Length418.6 feet Width75 feet Depth29 feet Alice Moran 4,300 HP Twin Screw Fednav ECONOMIC DEVELOPMENT A Quick Look Bonding specifics • Why Cleveland? • Beyond construction Making the deal Cleveland-based port authority helps bring to town When Amazon.com began show- ing interest in establishing distribution centers in the area, the Cleveland-Cuyahoga County Port Authority assembled a team to work on financing options. Today, the world’s largest online retailer is transforming two abandoned malls into Ohio-based robot.ics fulfillment centers—complete with jobs, infrastructure upgrades and oppor.tunities for area businesses. The sites are in two municipalities—North Randall and Euclid, about 15 miles apart. Located in industrial areas, the prop.erties were being marketed for redevelop.ment, offering large acreage, proximity to Cleveland and an available workforce. “The economic impact for us will be significant. This will be a catalyst for growth and development in our city,” said City of Euclid Mayor Kirsten Holzheimer Gail. “We are looking to attract additional businesses and to include home owner.ship opportunities for the workers. We are working with small businesses around North Randall and Euclid to take advan.tage of the opportunity by helping connect to e-commerce and get their goods out to the masses worldwide.” The fulfillment centers are being con.structed where Euclid Mall and North Randall Mall once welcomed thousands of shoppers. Both malls had been aban.doned for years and the buildings had de.teriorated. Amazon began by demolish.ing the buildings and beginning new construction. Once blights, the properties are being built out with identical centers—each with 855,000 square feet, 64 loading docks and parking spaces for about 2,500 cars and 200 semi-truck trailers. The centers will fulfill customer orders across Ohio, as well as to customers in the Midwest and North.east regions, according to Rachael Lighty, Regional Manager, External Communica.tions for Amazon Operations. “Employees at both locations will pick, pack and ship customer orders,” she added. Between the two centers, about 2,000 full-time jobs are being created. They come with benefits, including parental leave, company stock, healthcare, 401K retirement savings plans and a continu.ing education program. In 2017, Amazon directly created more than 130,000 new jobs in the company, bringing the global employee count to more than 560,000. Jobs estimated to have been created by Amazon Market.place’s growth number 900,000 world.wide, according to Lighty, plus another 260,000 jobs through construction, lo.gistics and other professional services. Bonding specifics. The port has broad economic development powers under the State of Ohio statute with respect to issuing bonds. It can issue taxable or tax-exempt debt, which can be publicly sold or private.ly placed with investors. The port has is.sued more than $3 billion in bonds over 100 projects since 1993. The port currently has more than $2 billion on conduit debt outstanding, according to Carl Naso, Chief Financial Officer for the Port of Cleveland. The port’s financing program helped pave the way for Amazon’s new Ohio cen.ters. As part of a package supported by the port and local and state officials, the port is.sued bonds valued at up to $113 million to fund the Euclid fulfillment center. The Tax.able Lease Revenue Bonds provide private.ly-sourced capital for the project with no fi.nancial risk or contribution by the port. “The Amazon project shows how the Port of Cleveland’s development finance capability can provide private dollars for catalytic economic development projects that benefit the larger community,” said Will Friedman, port President and CEO. “When the port found out about the project, we worked with our team and Amazon’s team in order to finalize the fi.nancing and legal structure and set up a timeline in order to achieve the closing date requested of Amazon,” Naso said. The primary goals of the Port of Cleve.land Development Finance Program are to foster economic development by sup.porting transformational projects that: • Improve the quality of life of Cuyahoga County residents • Stimulate the regional economy • Fuel job growth and retention of cur.rent jobs For the Amazon deal, the port issued $113 million worth of bonds to fund the Euclid center. The Taxable Lease Revenue Bonds provide privately-sourced capital for the project with no financial risk or contribution by the port. An additional $53 million is being funded by FC Euclid OH Landlord, LLC. Bonds were also issued for North Ran.dall. The funding packages contain prop.erty tax abatements from the local munic.ipalities and the state’s commitment to fund road improvements around the facil.ities and a 10-year job creation tax credit. The bonds were issued to Seefried In.dustrial Properties, the company spearhead- ing the development. The properties are be.ing subleased to Amazon. Rent payments will mirror debt service for the bonds. The port received an estimated $509,549 at closing for financing the project. Other examples of how the bond pro.gram has aided in economic development in the Cleveland area include: • The port issued $38 million in bonds for Charter Steel to facilitate its $146 mil.lion expansion. The deal involved various public sources of financing, including New Market Tax Credits. The company built a new cut-to-length bar facility which expanded their manufacturing capabilities and created jobs for the region. • The port assisted with the financing of The 9 project, which is located at the prom.inent intersection of Euclid Avenue and East 9th Street in downtown Cleveland. The project is a combination of historic and modern building design and financed a 156-room Marriott Autograph Collection hotel, 104 luxury and market rate apart.ments, 100,000 square feet of office and re.tail space, and a Heinen’s grocery store in the historic rotunda. The port issued $41.8 million in taxable capital lease revenue bonds towards the $170 million project. Bonding projects are chosen based on economic feasibility, the ability to create jobs and assist with economic growth in our region, and the ability to meet under.writing criteria as determined by the port and its financing partners. Why Cleveland? The initial initiator of Amazon’s quest for Ohio expansion came as a result of the growing number of orders in the state and region. As the company searched for locations, it considered multi.ple factors. The process includes evaluat.ing dozens of locations in any given year in response to increasing customer demand. “We also look at the workforce and we’ve found great talent in abundance in Ohio,” Lighty said. “Importantly, Amazon is always looking for ways to better serve our customers. These two facilities will enable us to reach customers throughout Ohio.” Once the fulfillment centers receive customer orders, employees will prep them for shipment. The loading bays will receive and deliver goods by trucks. Amazon currently employs more than 4,500 full-time employees at two other Ohio fulfillment centers, in Etna and Obetz. That number will increase by 3,000 people when the North Randall and Euclid centers, as well as one in Monroe, Ohio, to open by 2019. The company em.ploys several hundred full-time employees at our sortation center in Twinsburg, Ohio. “Our ability to expand and launch two new Amazon robotics fulfillment centers in the towns of North Randall and Euclid is the result of incredible customers and an outstanding workforce in the state,” Lighty said. “There are more than 65,000 authors, sellers and developers in Ohio growing their businesses and reaching new custom.ers on Amazon products and services.” Beyond construction. The North Ran.dall Amazon.com center will open first, by year’s end. Construction crews are now working inside the building. The exterior of the center in Euclid is still underway. It’s scheduled to open in early 2019. The centers will operate on their own; however, multiple centers could be involved in fulfilling a customer’s order, based on where the merchandise is available. Jobs at Amazon are being posted online. However, there are many businesses around the fulfillment centers adding to staff and planning expansion to provide services to the large number of employees who will be gathering at each center daily. Officials from Euclid and North Ran.dall are looking at how to best help local business benefit from the Amazon mo.mentum and how it can improve taxpayer services based on their growing tax base. According to Mayor Gail, Amazon has made it part of its expansion model to pro.vide hands-on training for area business.es, to show them how to partner with the company in growing their businesses. “We are already seeing an increase in interest with other developers and busi.nesses which want to be in the area,” Eu.clid’s Gail said. “This has put a spotlight on Euclid as a place to invest and a place for redevelopment. We’re working hard to capitalize on these new opportunities and to improve the community.” Janenne Irene Pung n ECONOMIC DEVELOPMENT Euclid Mall Redevelopment Lot Site Plan PROPELLING EXCELLENCE Karl Senner, LLC is proud to equip the M/V Millville with 2x REINTJES WAF 4555 Revers Reduction Gearboxes, Vertical Offset, with Internal Hydraulic Shaft Brakes. Owner: AMA Capital Partners Shipyard: Bay Shipbuilding Karl Senner LLC Karl Senner, LLC is the proud distributor of REINTJES Marine Gearboxes, Steerprop Azimuth Thrusters, and EPD Electrical Systems throughout North America. (504) 469-4000 www.karlsenner.com ECONOMIC DEVELOPMENT Randall Mall Redevelopment Lot Site Plan American Great Lakes Ports Association ECONOMIC DEVELOPMENT Bonding projects are chosen based on economic feasibility, the ability to create jobs and assist with economic growth in our region, and the ability to meet underwriting criteria as determined by the port and its financing partners. Husky Energy DREDGING A Quick Look Addressing the backlog Soo Locks funding skyrockets Dredged materials AN EXPANDING 2018 WORK PLAN Preparing and planning for Great Lakes’ 2019 projects Signs of optimism and progress mark the U.S. Army Corps of En.gineers’ 2018 efforts in support.ing Great Lakes navigation. Workplan additions for the year increased spending by $112.78 million, totalling $28.98 mil.lion for the region. The massive increase in funding has come through two bud.gets—Operations & Maintenance and Navigation Construction. From chipping away at the dredging backlog to finding major funding increas.es for Soo Locks modernization, the Corps is well equipped to sustain 60 commercial harbors, 104 miles of break.waters and jetties and over 600 miles of navigation channels. “We have a healthy budget this year and quite a few projects kicking off,” said Cindy Jarema of the Corps’ Detroit Dis.trict Water Hydrology Branch. The federal budget for fiscal year 2018 designates $161.4 million for Great Lakes operations and maintenance. “Contractors seem to have adequate capacity for the work they’re being asked to do, but they have to do more work in the same window of time,” said Dave Wright, Army Corps Detroit District Chief of Operations. Addressing the backlog. The FY2018 primary dredging budget of $55.63 mil.lion funds 40 projects. Indiana and Tole.do harbors received the most dredging dollars, with each allocated more than $5 million. The final workplan increases Cleveland’s dredging plan from $3.3 to $4.6 million. The annual dredging requirement to keep Great Lakes harbors open is 3.3 mil.lion cubic yards. With funding on the up.ward trajectory since 2012, the Corps has been able to play some catch-up. “We’ve really reduced the backlog,” said Marie Strum, Corps Detroit District Chief of Engineering and Technical Ser.vices. “We had backlogged by 18 million cubic yards of material and are down to 13.5 million.” Most dredging funding comes from the Harbor Maintenance Trust Fund. Jar.ema said that while funding is on an up.swing, it doesn’t necessarily guarantee future support. Any given year, dredging projects are prioritized based on use, shoaling rates, annual hydrological sur.veys and storm impact. “Great Lakes harbors have to compete with other projects beyond the Great Lakes,” she said. “We can’t think of it as a bubble.” Despite the overall positive funding trend, dredging funding shortfalls will likely continue. According to an Ameri.can Great Lakes Ports Association analy.sis, the Corps’ FY2019 budget for mainte.nance dredging of commercial harbors allocates $43 million to dredge and oth.erwise clear navigation channels at Great Lakes ports. The anticipated dollars fall short by $14.8 million to dredge the re.gion’s harbors to their federally mandated dimensions. With such a significant in.crease in the final FY2018 budget, con.versations continue on why funding for FY2019 should remain at the new level. With the increase in funding for this summer’s dredging, nearly $10 million in dredging is being scheduled in smaller harbors dotting the Great Lakes. $21.79 million in structural repair was added to the workplan for repairs in harbors in Ash.land, Buffalo, Burns (Ports of Indiana), Chicago, Cleveland, Cornucopia, Michi.gan City and Two Harbors. Rock removal in Calumet Harbor will cost $6.7 million. For a breakdown of FY2018 projects, please see the chart on page 16. Soo Locks funding skyrockets. As the hub of Great Lakes shipping logistics, modernization of the locks at Sault Ste. Marie, Michigan is critical. Soo Locks As.set Renewal went from being allocated $8.9 million to $15.82 million in the FY2018 budget. The $6.92 million in.crease came as Congress devised the final workplan. Funds target reinvesting in the MacArthur Lock with: • $5 million for bulkhead fabrication • $3.3 million for embedded anchorages • $2.25 million for log repairs • $400,000 for ship arrestor boom rehabilitation There is also $3 million budgeted for continued on page 18 West Center Pier rehab, $300,000 for Poe Lock Gate 1 Design for building a new Poe-sized lock, $300,000 for Davis Pump well design, $420,000 for miter gate pendants and nearly $1 million for designing a new emergency power generator and flow lock closure. Strum said the locks’ well system, which drains water to al.low for winter repairs, is a century old. It’s among the Corps’ highest renewal priorities. The multi-year Davis renewal proj.ect has a $35 million price tag. The long-delayed construction of a second Poe-sized lock may finally gain momentum in 2018. It’s not immediately clear how President Donald Trump’s recent statement on fix.ing the single-lock limitation for the system’s primary iron ore vessels will impact the project going forward. If he wishes, Trump could intervene and move the Soo Lock project to the front of the line for scarce budgetary resources. The twin lock is considered a national priority and essen.tial to maintaining cargo flow through the Great Lakes, han.dling about nine out of every 10 tons of cargo transiting the Soo Locks, according to a recent Great Lakes Maritime Task Force report. In the event the Poe Lock is disabled, without a twin lock, an estimated 11 million jobs would be at risk. A new benefit/cost analysis developed by a team of Corps econ.omists, engineers and others is expected to be released soon. “The last one (cost analysis) came in at $341 million. This one will be higher,” Strum said. “We’ll have to go to Congress with the new numbers. Then, we can compete for funding.” Dredged materials. With $11.32 for FY2018 and $10 mil.lion for FY2019 allocated for dredged material management, progress is being made at storing the sand and silt cleared from harbors and channels. Whether material is disposed in open water, at confined disposal facilities, used for beach nourishment or other purposes, it’s a balancing act for the Corps which must operate in accordance with individual state regulations and contractors. “The way we’re moving now, we have to think about how we can sustain it by coming up with beneficial use,” Jarema said. “It’s the path we’re trying.” To that end, the Corps put out a nationwide call for propos.als to create innovative pilot programs maximizing beneficial use of dredged material. Proposed projects meeting the March 2018 deadline address beach nourishment/coastal restoration, wetlands/marsh creation, storm damage risk reduction and sediment reclamation. Also proposed are plans for using dredged materials for construction projects, floodplain resto.ration, bird habitat and port expansion. Great Lakes states with proposals scheduled include Min.nesota, Wisconsin, Ohio and Pennsylvania. Other projects funded in the FY2018 budget include Chica.go lock maintenance; floating plant repair fleet at Calumet, Cleveland, Duluth-Superior, Indiana, Burns Harbor, Milwau.kee, Conneaut and Fairport; strike removal at the Detroit, St. Clair and St. Marys rivers; Lake Michigan diversion account.ing; Cleveland data collection; and breakwater assessment at Duluth-Superior.Sally Barber n The federal budget for fiscal year 2018 designates $161.40 million for Great Lakes operations and management, including federal shipping channel maintenance, maintenance of federal structures and operation and maintenance of the Soo Locks. DREDGING GREAT LAKES DREDGING | U.S. Army Corps itemizes navigation projects and funding 2018 OPERATIONS & MAINTENANCE BUDGET SOURCE: U.S. ARMY CORPS OF ENGINEERS Total………………………………..$161.40 million Primary Dredging………………$55.63 million………………………………(4.46 million cubic yards) Port……………………………………………..Million $ Ashtabula1.35 Burns Harbor2.18 Calumet1.52 Cleveland Harbor4.60 Conneaut Harbor1.65 Duluth-Superior Harbor3.12 Grand Haven Harbor1.10 Green Bay Harbor3.50 Holland Harbor1.60 Indiana Harbor5.58 Lorain Harbor2.50 Manistee Harbor0.66 Milwaukee Harbor1.00 Monroe Harbor0.65 Saginaw River3.20 Sandusky Harbor1.65 St. Clair River Channels1.00 St. Joseph Harbor0.77 Toledo Harbor5.38 Two Rivers1.05 Waukegan Harbor2.00 Dredged Material Management $11.32 million CDF Operations (Cleveland, Indiana, Saginaw) $4.90 CDF Maintenance (Buffalo, Detroit River, Indiana, Saginaw) $4.75 CDF Fill Management (Calumet) $0.62 DMMP (Cleveland, Toledo, Calumet) $1.05 Lock Operation & Maintenance (Black Rock, Chicago, Soo) $19.58 million Soo Locks Asset Renewal $15.82 million (See the breakdown in the story on page 15 and additions from the Navigation Construction Allocation below) Chicago Lock Maintenance (Site Lighting Replacement/Upgrade) $0.22 million Project Condition Surveys $9.57 million Floating Plant Repair Fleet $11.16 million (Calumet, Cleveland, Duluth-Superior, Indiana, Burns Harbor, Milwaukee, Conneaut, Fairport) Strike Removal (Detroit River, St. Clair, St. Marys River) $6.44 million Lake Michigan Diversion Accounting $1.10 million Regional Economic Data Collection (Cleveland) $0.25 million Breakwater Assessments (Duluth-Superior) $0.25 million 2018 NAVIGATION CONSTRUCTION GENERAL BUDGET Soo Locks Major Rehabilitation $57.58 million Poe and Davis Pump Well System 42.00 Poe Lock Ship Arrestors 4.20 MacArthur Lock Tainter Value 5.20 Poe Lock Bulkheads 6.20 Total………………………………….$108.7 million Primary Dredging………………$39.83 million………………………………..(2.9 million cubic yards) Port……………………………………………..Million $ Ashtabula Harbor$1.30 Burns Harbor1.49 Calumet Harbor and River2.50 Cleveland Harbor4.60 Conneaut Harbor1.13 Detroit River2.00 Duluth-Superior3.00 Fairport Harbor1.15 Grand Haven1.50 Green Bay Harbor3.50 Holland Harbor0.60 Indiana Harbor3.77 Ludington Harbor0.50 Milwaukee Harbor1.50 Rochester Harbor1.20 Rouge River1.20 Sandusky Harbor1.30 St. Clair River0.80 St. Joseph Harbor1.50 Toledo Harbor3.78 Waukegan1.53 Project Condition Surveys $9.96 million Lock Operation & Maintenance (Black Rock, Chicago, Soo) $19.80 million Black Rock Lock 1.91 Chicago Lock 3.08 Soo Locks 14.80 Floating Plant Repair Fleet $13.22 million (Ashtabula, Buffalo, Burns Harbor, Calumet, Cleveland, Duluth-Superior, Indiana, Milwaukee) Strike Removal (Detroit River, St. Clair, St. Marys River) $6.57 million Dredged Material Management $10.59 million CDF Operations (Cleveland, Indiana, Saginaw, Toledo) 4.81 CDF Maintenance (Detroit, Buffalo, Indiana, Saginaw) 3.34 CDF Fill Management (Calumet) 0.62 DMMP (Calumet) 0.13 Sediment Sampling & Analysis, Modeling and Compliance (Buffalo) $1.69 million Lake Michigan Diversion Accounting $0.85 million Regional Economic Data Collection (Cleveland) $0.25 million Breakwater Assessment Team (Duluth) $0.25 million Soo Locks $2.40 million Poe Lock Gate 1 Repairs-Phase 1 $2.00 million Gov’t Plant Support to Soo Winter Lock Closure $0.40 million Black Rock Lock $4.25 million Lower Gate Diagonal Replacement 2.60 Pintle Replacement 1.65 Structure Repair 0.75 Grand Haven Harbor-E&D Repair $0.25 million North Pier Wave Attenuation / Chicago Lock-North Pier Utilities Relocation $0.50 million Toledo Lucas County Port Authority Toledo Port Port of Toledo DREDGING 2019 OPERATIONS & MAINTENANCE SOURCE: U.S. ARMY CORPS OF ENGINEERS Any Type Dry Cargo Bulk Commodity GREAT LAKES | BULK SELF-UNLOADING IRON ORE | STONE | COAL VTB VanEnkevort Tug & Barge, Inc. Van Enkevort Tug & Barge, Inc. Van Enkevort Tug & Barge, Inc. SEEKING MARINE PROFESSIONALS MATES, ENGINEERS AND AB’s / DECKHANDS Days: (906) 786-1717 Fax: (906) 786-1700 vtbarge@vtbarge.com 909 N. Lincoln Rd. Escanaba, MI 49829 Ocean Ocean Group Group Ocean The long-delayed construction of a second Poe-sized lock may finally gain momentum in 2018. GUEST EDITORIAL PRESSING FOR PROGRESS It’s time to approve various funding packages for Great Lakes/Seaway infrastructure SEN. GARY PETERS U.S. Senator (D-MI) The Great Lakes are renowned for clear, blue waters and picturesque shorelines, but no sight exemplifies their economic power better than a 1,000-foot freighter gliding along the horizon. Carrying everything from iron ore and coal to grain and other commodities, these vessels move more than 160 million metric tons of cargo through the Great Lakes/St. Lawrence Seaway system every year. In turn, the harbors, locks, rivers and waterways that make up this critical supply chain also support more than 13 million American jobs and $4 trillion in international trade. In recent years, aging infrastructure and navigation challenges have contribut.ed to a decrease in shipping traffic through.out the Great Lakes/St. Lawrence Seaway system. In order to keep this critical trans.portation network operational, we must fund and upgrade our maritime infra.structure—just as we would our roads and bridges. As the Ranking Member of the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safe.ty and Security, I’m focused on making critical investments in our ports, harbors and waterways to ensure commerce can continue unhampered on the Great Lakes. Just recently, the Senate Commerce, Science and Transportation Committee approved a bipartisan bill I introduced along with Senator Deb Fischer (R-NE) to reauthorize the U.S. Maritime Adminis.tration (MARAD), the federal agency re.sponsible for promoting and maintaining a strong commercial maritime industry. Delving deeper. In addition to sup.porting continued maintenance of our na.tion’s commercial shipping infrastructure and security, the bill also includes a provi.sion to conduct a competitiveness study for the Great Lakes/St. Lawrence Seaway system. This study will analyze issues and make recommendations for improvements in the system in a range of areas, including maritime routes and alternative routes, competing transportation options, port in.frastructure quality, port efficiency, inter.modal connections, taxes and fees, regula.tory burdens and more. In Michigan, communities from the Port of Monroe to the Port of Muskegon are enthusiastically working to rejuvenate the regional maritime system by increas.ing their efficiency, reducing costs and en.couraging new markets like cruise ships, containers and short sea shipping. This competitiveness study will help identify opportunities for ports and communities throughout the Great Lakes/St. Lawrence Seaway system as they strengthen their maritime assets. A critical need. We must also address what the Department of Homeland Secu.rity has called the Achilles’ heel of our economy—the threat of a service outage at the Soo Locks. This vital link in our na.tional supply chain is operating with equipment that has been used far beyond its intended lifecycle—including water pumps that are over 100 years old. Even more concerning is the risk posed to our economy from a bottleneck or outage at the Poe Lock, the only lock big enough for the largest freighters, those 1,000 footers. This would create a chokepoint, literally cutting off the flow of commerce. There is no realistic alternative to move the iron ore that our country’s manufacturing industry depends on, and a Homeland Security re.port estimated that a disruption at the Poe Lock could cause a recession and cost up to 11 million American jobs. We cannot risk that level of economic catastrophe, which is why I joined with my colleagues from Michigan to intro.duce bipartisan legislation that would au.thorize funding to modernize the Soo Lock system by building an additional Poe-sized lock. My colleagues and I also secured funding to compel the U.S. Army Corps of Engineers to issue a corrected cost-benefit study on the proposed con.struction of the second lock. I’m grateful that the recently introduced Senate Water Resources Development Act will autho.rize this essential project, and I look for.ward to working with the Administration to fulfill President Trump’s promise that he will fully fund the needed construc.tion at the Soo Locks. Funds for icebreaking. Many of those businesses continue their operations year-round, and they depend on freighters to deliver goods and materials no matter the weather conditions. Recent winters have seen higher than average ice cover on the Great Lakes. Over the winter of 2014-15, ice cover led to an estimated 3.2 million ton decrease in cargo, costing nearly $355 million in lost revenue and 2,000 lost jobs. Yet the U.S. Coast Guard’s aging fleet in.cludes only one heavy icebreaker operat.ing in the Great Lakes—the Mackinaw. I worked to pass legislation to authorize construction of a second Great Lakes heavy icebreaker to keeping shipping lanes open and goods moving throughout even the toughest winters, and I will continue press.ing for funding to complete construction of the new vessel. Great Lakes shipping is a vital part of our economy. From the millions of fami.lies who depend on the jobs it creates to entire industries supported by shippers—there is a lot riding on maritime commerce. I’m committed to ensuring the Great Lakes/St. Lawrence Seaway system has the re.sources needed to continue playing this critical role for decades to come. n I look forward to working with the Administration to fulfill President Trump’s promise that he will fully fund the needed construction at the Soo Locks. Algoma Central Corporation ECONOMIC DEVELOPMENT A Quick Look Recognizing value Looking to rebuild Outlining recommendations Devising a strategy Ohio releases its first state maritime strategy MARC-ANDRÉ ROY Managing Partner, Strategy and Knowledge CPCS Ohio’s Department of Transporta.tion (ODOT) recently released the Ohio Maritime Strategy, a first for the state. The strategy seeks to guide ODOT’s Division of Planning, among other state and local agencies, in leverag.ing Ohio’s maritime transportation sys.tem to best enable Ohio’s economic com.petitiveness and growth. This Strategy represents the capstone of the 18-month Ohio Maritime Study that was profiled in the April-June 2017 edition of the Great Lakes/Seaway Review. The strategy was published on ODOT’s website (www.maritime.ohio.gov), along with the seven technical working papers that together comprise the outputs of the broader Ohio Maritime Study. The relat.ed research and analysis was undertaken for ODOT by a consulting team led by CPCS, in association with W.R. Coles and Associates and Dr. Peter Lindquist. The impetus and need for this work was twofold. First, Ohio’s maritime trans.portation system—comprising both the Lake Erie and Ohio River maritime sys.tems—was less understood by the State of Ohio relative to road and rail transport and, consequently, underleveraged in state plans, including the state’s Long Range Transportation Plan (Access Ohio, May 2014) and Ohio’s Statewide Freight Plan (Transport Ohio, January 2017). The Ohio Maritime Study sought to address this gap. Second, Governor John Kasich’s commitments to a Great Lakes Maritime Strategy through the Conference of the Great Lakes St. Lawrence Governors & Premiers compelled an opportunity and need to develop a supporting state mari.time strategy. Recognizing value. Ohio’s maritime transportation system, or MTS, is a rich as.set to the state and a key component of the state’s multimodal transportation system. It comprises 736 navigable miles of waterway, including 265 coastal miles along Lake Erie, 11 navigable miles along the Maumee River, nine navigable miles along the Cuyahoga River and 451 river miles along Ohio’s portion of the Ohio River. There are eight ports on Lake Erie, in.cluding the Ports of Cleveland and Tole.do, and dozens of docks and terminals. There are a further 162 commercial docks along the Ohio River, along with nine locks and dams on the Ohio portion of the Ohio River. The Lake Erie and Ohio River components of Ohio’s maritime system generally operate as two distinct maritime transportation systems. The ports, terminals and docks that provide connectivity to Ohio’s MTS han.dle between 80 and 100 million short tons of freight per year (2011-15), valued at over $12 billion (2015). The most significant Lake Erie port facilities by volume are Cleveland and Toledo. Bulk commodities, notably coal, iron ore, limestone and other aggregates, grain and petroleum products are among the major commodities han.dled by Ohio MTS facilities. According to U.S. Army Corps of Engineers data, the largest shares of Ohio MTS freight flows by volume (58 percent) and by value (70 per.cent) are carried on the Ohio River. This traffic, and the related industrial operations that rely on this freight, gener.ate billions of dollars in economic activity and hundreds of thousands of jobs rely on Ohio’s MTS. Specifically, Ohio’s freight re.liant industries—defined for purposes of the Ohio Maritime Study as including the goods-producing sectors together with utilities, wholesale and retail trade, and transportation and warehousing—pro.duced $238 billion in Gross Domestic Product (GDP) in 2014, or about 40 per.cent of Ohio’s total GDP. These freight reli.ant sectors, which include the construc.tion and civil works sectors, utilities and energy sectors, manufacturing, petroleum and chemicals as well as agricultural sectors, also account for 1,914 million jobs (2015) or about 35 percent of total employment in Ohio. Several JobsOhio Target Industries also rely on Ohio’s MTS for parts of their supply chains to be competitive. The supply chains of those sectors that use the Ohio MTS vary greatly—from in.bound thermal coal for coal-fired power production, to steel coil shipments for heavy manufacturing, to outbound grain destined to global markets. But what is consistent is that these sectors use the MTS predominantly because of the low cost of maritime transportation relative to other transportation modes; particularly for high volume, low value per ton freight flows. The low-cost maritime transportation option provided by Ohio’s MTS is critical to enabling the competitiveness of many of Ohio’s key economic sectors—without which Ohio’s economy would suffer. Looking to rebuild. It is true that the maritime traffic in Ohio has declined over the last 15 years. Many bulk com.modities that have historically been the heaviest users of Ohio’s MTS (e.g. coal, iron ore) have evolved, dragging down total MTS volumes. Economically im.portant opportunities are nevertheless emerging and driving new or growing traffic to Ohio’s MTS. Chemicals, plastics and petroleum products, which are sup.portive of state strategic economic devel.opment objectives, are trending upward and this is expected to continue. Notwithstanding traffic trends, the mar.itime option in Ohio needs to be protected and made more competitive, as maritime continues to provide the lowest cost transportation options for many of Ohio’s most important economic sectors. This reality underpinned the Ohio Maritime Strategy. Three other key contextual factors in.formed the Ohio Maritime Strategy: Few capacity issues within Ohio’s MTS: Most maritime ports and terminals in Ohio are operating well below their phys.ical capacity limits and can accommodate greater traffic levels. There are neverthe.less capability limits to handling different types of cargo at specific ports and termi.nals and a range of other physical and op.erating constraints. Many of the constraints to competitive.ness are institutional: Policy, planning, reg.ulatory and other “institutional” issues include limited recognition and integra.tion of maritime transportation in feder.al, state and regional transportation and economic development plans, a host of MTS fees and charges on the Great Lakes, institutional barriers to modal connectiv.ity, and evolving and, at times, inconsis.tent regulations. These issues are not new and have been regularly reported in Great Lakes/Seaway Review. Limited State role in governance of Ohio’s MTS: Governance of the marine highway system falls under federal jurisdiction. Ports and terminals, the “on/off ramps” providing access to the marine highway system, are governed locally and the vast majority of docks and terminals in Ohio are privately owned and all are privately oper.ated on a commercial basis. The State of Ohio’s span of influence over the perfor.mance of Ohio’s MTS is largely limited to the landside components of the system and economic development initiatives. Outlining recommendations. So what should be the role of the State of Ohio in the maritime transportation system? The Ohio Maritime Strategy emphasized six key recommendations: • Leverage and build on the Ohio Mari.time Study in policy and planning. ODOT to leverage the research and analysis in the Ohio Maritime Study to better integrate Ohio’s MTS in state multimodal transpor.tation policy development and planning and leverage the Ohio Maritime Strategy as a platform for deeper and sustained en.gagement with Ohio MTS stakeholders. • Provide leadership and coordination. ODOT to continue to be a key point of contact for Ohio’s maritime sector stake.holders and provide leadership and coor.dination in bringing the maritime com.munity together. In addition, ODOT can disseminate information, advocate for the MTS sector within the State of Ohio and also coordinate engagement with in.dustry through forums or user groups. • Engage with federal stakeholders to re.move institutional barriers to MTS perfor.mance. For the Lake Erie component of Ohio’s MTS, this could potentially be done through the Conference of the Great Lakes St. Lawrence Governors & Premiers, which already has a Maritime Strategy that includes federal engagement on the many key institutional issues identified in the Ohio Maritime Study (e.g. Seaway season optimization, reducing the cost of pilot.age, funding for dredging, etc.). • Promote the Marine Transportation System. ODOT to work closely with Jobs-Ohio and other economic development agencies in the state (including those at the local level) to promote Ohio’s MTS as a key component of Ohio’s broader multi.modal transportation system. • Improve access to existing funding pro.grams and agencies. The State of Ohio to promote and leverage the full range of ex.isting state and federal funding programs and agencies that can bolster the perfor.mance and use of Ohio’s MTS. In addi.tion to other ongoing programs, the state should continue to be reactive and flexi.ble when it comes to making funding and other incentives available to secure large private sector investments by companies that need Ohio MTS access. • Prioritize state investment in Ohio’s MTS in accordance to clear principles. Al.though there are few physical capacity is.sues within Ohio’s MTS, state invest.ments in the MTS could help increase the capabilities of ports and terminals. These investments should be prioritized based on a set of principles that align with this Ohio Maritime Strategy. The bottom line of the Ohio Maritime Strategy is that the maritime option in Ohio needs to be preserved and support.ed, given its economic importance to the state. Near-term focus should be on en.abling better connectivity where mari.time provides a competitive advantage and is in line with market needs. Immediate steps with respect to imple.mentation of the Ohio Maritime Strategy include the creation of Lake Erie and Ohio River user groups over the coming months to help guide and advance its six key strat.egies. Related plans will be announced in the coming weeks and months.n Algomarine delivers rail ballast stone from Canada to the Ironville terminal at the Port of Toledo. The ballast stone is loaded onto Norfolk Southern railcars and distributed along the tracks throughout the rail network. The low-cost maritime transportation option provided by Ohio’s MTS is critical to enabling the competitiveness of many of Ohio’s key economic sectors—without which Ohio’s economy would suffer. GREAT LAKES/SEAWAY REVIEW April-June, 2018 21 Near-term focus should be on enabling better connectivity where maritime provides a competitive advantage and is in line with market needs. Adonis Chicago Dry Dock TPG Marine Enterprises Chicago Drydock ECONOMIC DEVELOPMENT Ohio’s Multimodal Transport Infrastructure — LEGEND — — Interstates — Railroads — Key Rivers l Principal Ports Ohio’s Marine Transportation System is a key component of the state’s multimodal freight transportation system. SOURCE: CPCS, US ARMY CORP OF ENGINEERS, CONSULTATIONS Ohio Maritime Transportation System Commodities, Total (Million Tons, 2015) n Internal n Receiving n Shipping Manufactured Goods Lumber, Logs, Wood Chips Non-Ferrous Ores and Scrap Chemical Fertilizers Chemicals excl. Fertilizers Primary Non-Metal Products Primary Metal Products Petroleum Pro

Maritime Editorial