Marine Delivers Magazine 2019

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Rand Logistics, Inc. 333 Washington Street, Suite 201, Jersey City, New Jersey 07302 Phone: 212-863-9403



Chamber of Marine Commerce EDITORS


Sophie Belina Brzozowska



SPIN Visual Communications EDITORIAL OFFICE

350 Sparks, Suite 1208 Ottawa, Ontario, Canada K1R 7S8 Tel. 613-233-8779

17 7 FROM THE PUBLISHER On the Radar: Shaping the Future of Shipping 9 Message from Premier Doug Ford 10 BY THE NUMBERS Marine Delivers for Ontario 12 POLICY Shaking up Shipping: What’s next for the Chamber of Marine Commerce? 15 Seaway at 60: An innovative binational waterway prepares for future challenges


17 IN CONVERSATION Logistec’s Madeleine Paquin 20 SMART SHIPS Canadian carriers adopting new digital technologies

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Copyright 2019 Chamber of Marine Commerce The content of Marine Delivers Magazine may not be reproduced without prior written consent. Printed in Canada.

22 GREAT LAKES World’s first fresh water test site for autonomous ships

24 24 ENVIRONMENTAL INNOVATION Collaboration saves whales 26 PORT PIONEERS Port of Montreal pilots Blockchain technology 28 TRADE WINDS Shipping capitalizes on new free trade agreements with Europe and Trans-Pacific 30 PORT INNOVATION Port of Cleveland – Choosing an Alternate Path to Protect the Environment 31 ECONOMIC OUTLOOK BMO Capital Markets’ forecast for the Great Lakes-St. Lawrence Region 34 LOOK AHEAD Industry executives give their forecasts for the 2019 shipping season

ADVERTISERS’ INDEX Algoma Central Corporation ....................................................................................... Back Cover Canada Steamship Lines .................................................................................................... Page 3 Georgian College.............................................................................................................. Page 27 Green Marine ................................................................................................................... Page 32 Groupe Desgagnés .......................................................................................... Inside Front Cover Logistec ............................................................................................................................ Page 33 McAsphalt Marine Transportation Limited ........................................................ Inside Back Cover Port of Hamilton ............................................................................................................... Page 14 Port of Montreal ............................................................................................................... Page 19 Port of Johnstown ............................................................................................................ Page 23 Rand Logistics Inc. .............................................................................................................. Page 4 Sterling Fuels ...................................................................................................................... Page 8 The St. Lawrence Seaway Management Corporation ........................................................ Page 5 6

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ON THE RADAR: Shaping the Future of Shipping

– we are not resting on our laurels but looking for new ways to shape the future success of shipping. For the Chamber, this means tackling our biggest policy challenges. On pages 12-14 of this edition, we lay out our key plans and political priorities for 2019. It also means demonstrating to legislators and policymakers that betting on marine equates to building a prosperous and safe, sustainable future for Canadians and Americans. And in this Innovation Issue of Marine Delivers – the proof is in the proverbial pudding (er, reading). We have an exciting year ahead of us as we continue to build on the economic success and environmental progress of 2018.



his year will mark a major milestone in the Chamber of Marine Commerce’s history – its 60th anniversary.

For those that don’t quite remember our beginnings, the Chamber was formed in 1959 to provide a voice for the customers and ship operators moving goods on the newly opened St. Lawrence Seaway. Today, 60 years later, our bi-national industry association represents more than 130 members along the entire marine transportation supply chain. We have strong support from our membership and a clear strategic plan to advocate for policy that recognizes inland and coastal shipping’s significant advantages in the Great Lakes, St. Lawrence, Coastal and Arctic regions. Over the years, the Chamber has had many successes but – like its members

This past year, a study calculated that bi-national Great Lakes-St. Lawrence Waterway shipping supports 329,000 jobs and more than $60 billion (USD $46 billion) in economic activity in Canada and the United States. This invaluable contribution is recognized by Ontario’s new premier Doug Ford in a message on page 9. And in honour of that message, we’ve done an infographic deep-dive on how Ontario shipping more specifically impacts our daily lives on pages 10-11. 2018 was also a stellar shipping season for our members – with St. Lawrence Seaway cargo volumes increasing almost 7 per cent in 2018, reaching 40.9 million metric tons for the first time since 2007. On pages 15-16, Terence Bowles (CEO of the Canadian St. Lawrence Seaway Management Corporation) and Craig Middlebrook (Deputy Administrator of the U.S. Saint Lawrence Seaway Development Corporation) mark the binational waterway’s 60th anniversary by explaining how pioneering technology investments have attracted new customers, while improving business operations and safety.

On pages 17-19, we have an exclusive interview with Madeleine Paquin, CEO of LOGISTEC – who is regularly fêted for her role in leading innovation in supply chain practices and environmental protection. On pages 20-21, Canadian shipowners continue their early-adopter legacy with smart ship technology trials. On page 22, we reveal what the world’s first fresh-water test site for autonomous ships will be doing this summer in the Great Lakes. And on pages 24-25, we demonstrate how collaboration between industry, scientists and the government has really paid off to protect North Atlantic Right whales and we explore the new frontier in whale detection. And let’s not forget our trailblazing ports. The Port of Montreal is joining Maersk and IBM to pilot block-chain technology that tracks the entire world journey of a container in one platform. On pages 26-27, the project architects discuss how this could reduce administrative costs for shippers and improve port planning for rail and truck connections. Of course, innovation is not just about technology. It also extends to coming up with new ways to solve problems and this is aptly demonstrated by the Port of Cleveland on page 30 – which has successfully figured out how to dispose of sediment (dredged from the bottom of waterways to maintain clearance for ships) while keeping commerce flowing and local water sources clean. The reality is marine shipping — our oldest way of transporting goods — hasn’t been your grandfather’s industry for quite a long time. This industry is full of passionate, forward-thinkers looking for new ways to deliver for their customers, ensure the safety of their people and protect the environment in which they operate. We are, as always, proud to tell their stories in Marine Delivers. n 7

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Premier of Ontario - Premier ministre de l’Ontario Premier of Ontario - Premier ministre de l’Ontario






’m delighted to extend greetings to the readers the edition of Marine I’m delighted to extend greetings to the of2019 the 2019 I’m delighted to extend greetings to the readers ofreaders the of 2019 Delivers, published by the Chamber of edition ofof Marine Delivers, published by the Chamber Marine of Marine edition Marine Delivers, published by the of Chamber Marine Commerce (CMC). Commerce (CMC). Commerce (CMC).

Ontario’s Great Lakes and St. Lawrence

Ontario’s Great Lakes and St. Lawrence Seaway system playsplays a Seaway system a significant role in Ontario’s Great Lakes and St. Lawrence Seaway system plays significant role in our government’s priorities for job creation and our government’s priorities forajob creation economic growth. industries rely on waterborne trade and significant role Ontario in our government’s priorities for job creation and economic growth. Ontarioand industries commerce to get goods and material to and from market. The Great rely on waterborne trade and commerce to economic growth. Ontario industries rely on waterborne trade and get goods and material Lakes and St. Lawrence waterway also directly supports more than to and from market. commerce to get goods and material to and from market. The Great The Great Lakes and St. Lawrence waterway 70,000 jobs and $10 billion in activity in Ontario.

Lakes and St. Lawrence waterway also supportsmore morethan than70,000 also directly directly supports jobs and $10 billion in activity in Ontario. 70,000 jobs billion activity Ontario. I would like to and thank$10 the CMC for in everything itin does to promote

efficient trade through Ontario’s marine transportation system, which I would like to thank the CMC for everything it is one of the largest and most dynamic economic regions in the world. to promote trade through Ontario’s marine transportation system, which Idoes would like to efficient thank the CMC for everything it does to promote CMC can be proud of its long-standing dedication to promoting is one of the largest and most dynamic economic regions in the world. CMC can be efficient trade through Ontario’s marine transportation system, which marine trade and commerce. proud of its long-standing dedication to promoting marine trade and commerce.

is one of the largest and most dynamic economic regions in the world. Our will continue work withwith our our many valued trade Ourgovernment government will continue to work many valued trade partners in the CMC can be proud of its to long-standing dedication to promoting partners in the US and internationally to help create jobs,business support growth, and let the US and internationally to help create jobs, support marine trade and commerce. world know thatand Ontario openknow for business. business growth, let theisworld that Ontario is open for business.

Our government will continue to work with our many valued trade partners in the US and internationally to help create jobs, support business growth, and let the world know that Ontario is open for business. Doug Ford

Doug Ford Premier of Ontario Premier 9



Canada’s Urban Ocean Ontario – adapted from the Iroquois word for “beautiful water” or “beautiful lake” is bordered by the St. Lawrence Seaway and four of the Great Lakes: Huron, Ontario, Erie and Superior. More than 98% of Ontario residents live within the Great Lakes and St. Lawrence River Basin, and this area supports more than 75% of Canada’s manufacturing, and a third of the country’s employment in agriculture and food processing.





STEEL 1.8 million

GRAIN 11.3 million

GENERAL CARGO 373,552 COAL 4.2 million

IRON ORE 9.1 million

OTHER DRY BULK 4.1 million

CEMENT 3 million SALT 9.2 million OTHER LIQUID BULK 682,065

STONE 12.3 million






Ontario ports handle more than 11 million metric tons of grain on behalf of Canadian farmers. This grain (wheat, corn, soybeans, canola, peas, lentils, barley) produces everything from bread, pasta, soy milk and vegetable oil to beer, alcohol, ethanol gasoline and animal feed for domestic use and world markets.

Did you know all of the raw sugar used by Canada’s oldest sugar refinery is transported by ship to Toronto? Redpath Sugar is used in everything from sweetening coffee to drink crystals and Canadian household food brands and baked goods.

From the steel, dry wall, concrete and cement used to build a home to the steel used in the kitchen and laundry appliances – these are all materials delivered by ship.

One of Ontario shipping’s biggest customers is the construction industry – delivering the huge volumes of materials (stone, steel, asphalt, cement, gypsum) that are used to build the highways, bridges, offices, factories, schools and hospitals that keep cities working.

More than 5.4 million metric tons of petroleum products are handled by Ontario ports, fuelling up cars, buses, trucks and airplanes – including those whisking you away on holiday.






Ontario is home to two huge salt mines in Windsor and Goderich. Ontario ports handle more than 9 million metric tons of road salt from these mines and others that are used to salt highways, roads and sidewalks during the winter.

Ships transport the raw materials used by Ontario s t e e l m a n u f a c t u re r s , enabling them to supply products for automotive manufacturing, construction, factory equipment and pipelines in Canada and the U.S. Ships also transport aluminum to produce vehicles, planes and other products.

One Ontario-bound ship can carry as much as 963 truck loads. Using ships to transport cargo between cities reduces highway congestion and your morning commute. As the safest way to transport goods, moving more goods by ship would also improve public safety.

Marine shipping is the most efficient, cost-effective way to transport huge volumes of materials, saving companies close to $4 billion (USD) annually compared to land alternatives. This helps Ontario manufacturers, farmers, construction companies and energy providers be more competitive and keeps the cost of consumer goods down.

Inland shipping is part of the solution for climate change. Ships are 7 times more fuel efficient than trucks and have the lowest carbon footprint per tonne/km. New ship designs, engine technology and types of fuel used over the next few years are expected to reduce other air emissions like sulphur oxide by 99%. 11


SHAKING UP SHIPPING As it celebrates its 60th anniversary, President Bruce Burrows talks about what’s next for the Chamber of Marine Commerce.


First a little bit of history. The Chamber was originally formed in November 1959 to provide a voice for the customers and ship operators moving goods on the newly opened St. Lawrence Seaway; so what were the hot-button issues at that time? For many years, the organization was really focused on one goal – eliminating and then later reducing or preventing increases to the tolls that the government was charging to pass through the Welland Canal and the St. Lawrence Seaway. They were concerned that the tolls would make their business uncompetitive.


How has the Chamber evolved over the years? Its membership has grown from 5 to 130 members, but more significantly the Chamber now has a really diversified membership base that includes organizations from every part of the marine transportation supply chain and across 20 U.S. states and all 10

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Canadian provinces. We also count stakeholders like the St. Lawrence Seaway, other industry associations and town/cities in our membership – it’s a collective approach. We’re all trying to row together in the same direction to grow the industry. We are still advocating for government policy that improves competitiveness and lowers transportation costs – but these days that extends to a much wider range of issues. Everything from infrastructure investment, Coast Guard ice-breaking assets and pilotage reform to environmental regulation, trade agreements, workforce development and general industry promotion and awareness – it’s all in our wheelhouse. Two years ago, the Chamber merged with the Canadian Shipowners Association (CSA) to fully incorporate ship owner interests into the family, and then developed a new strategic plan (“Vision 2022”) that expanded its mandate beyond the bi-national Great Lakes-Seaway to promote the advantages of inland and coastal shipping along the entire St. Lawrence River, east and Arctic coasts.


What have been some of the major achievements in recent years? Throughout the years, the Chamber’s greatest strength has been its ability to bring together all aspects of the marine logistics chain and its customers to put forward one united position on marine shipping’s biggest challenges. For example, this collective front helped eliminate the 25 per cent duty on foreignbuilt ships and as a result Canadian ship owners were able to build $2 billion worth of new eco-ships with significant environmental and safety advances. In 2017, the “new” CMC also successfully brought our members together during the unexpected highwater crisis in Lake Ontario and the St. Lawrence and kept the Seaway open with a compromise solution, collectively pushing back on U.S. political forces that wanted to close down operations to let more water flow downstream. The CMC revealed that if the Seaway had closed, it would have cost $50 million in economic activity every day. Those are just a couple of examples. The Chamber has also taken a leadership role over the last 10 years

Policy in bringing different shipping interests together to produce a series of studies that for the first time measured the economic and environmental benefits of marine shipping in the Great LakesSt. Lawrence region and its safety performance. These reports have been invaluable to the success of our industry’s advocacy efforts and pillars of the CMC’s communications program. A new economic impact study for Great Lakes-St. Lawrence region was launched just this past year.

Q You were appointed President in

December 2016, following the CSA merger. How have things changed post-merger? The linkages between the different players in the bi-national marine logistics chain are stronger and the shippers, in particular, are being encouraged to take a more active role. But, perhaps above all, I think we’ve become a more strategic organization. We went out to our membership and asked them how can we best serve their interests and we created a very focused action plan, as referenced earlier, with clear objectives based on their priorities. We then leveraged the combined resources and strengths of our two founding memberships and created one cohesive team that has technical specialists in government relations,

marine operations, environmental policy and communications. We are also bringing in more top executives from our member companies to serve on the Board of Directors and, in particular, a number of expanded Chamber committees under a modern governance structure. This gives members greater input, oversight, and transparency on decision making; but it also allows us to drawn upon some incredible expertise in finance, shipping operations, human resources and communications which make our activities much more impactful. And finally, my big mantra is collaboration and coalition building. I truly believe that “together we are stronger.” On every issue, we are looking to pull our different members together and partner with other industry associations and stakeholders to find common ground and deliver sustainable growth for the marine shipping industry.

Q With two years under your belt now, what do you see as inland and coastal marine shipping’s greatest challenges? Social licence is huge. It underpins all government policy and regulation. We

have to show the public and government that we deserve to do business in the waters in which we operate. Marine has a great story to tell on this front because we are the safest and most environmentally-friendly mode of transport and we are really quite innovative in our efforts to improve our footprint. But we really need to get out there more and prevail upon people that marine is not a problem, but a solution to addressing public interest needs. Costs are still a big challenge, particularly for inland shipping which directly competes with trucking, railroading and other waterway routing options. We need to take more costs out of the system – like reforming the pilotage system which adds quite a bit to the bottom line - and really push back on a litany of red tape and user fees. And finally, we are already feeling the bite of a skills shortage. We are competing against other industries for the next generation of workers but marine shipping is not really on the radar for most people. This is a really important issue that you will see the Chamber more focused on going forward.

13 13



Going into 2019, what will be the Chamber’s key political priorities in Canada? Well, this is going to be a very interesting year. The federal government has said that they will introduce legislation to reform the Pilotage Act. We will be pushing hard for legislators to not just tinker but really transform a governmentmandated service that for decades has been provided by monopolistic entities with little accountability or input from industry – despite the fact that it is paid for by industry fees and these costs are passed ultimately to consumers. The U.S., which shares many of the same challenges, will be watching this development closely. Canada is also having a federal election in October, which is a great opportunity for us to really build awareness with all political parties about how inland shipping can be part of the solution to so many societal problems, from climate change to highway congestion and reducing the risk of accidents. Post-election, the Chamber will again be holding its new, and very successful Marine Day on the Hill event to give our members a chance to meet Members of Parliament and get our issues on the winning party’s government agenda. CMC has also recently been engaged to provide advocacy services to a newlyenergized Ontario Marine Transportation Forum to help build recognition of the importance of the marine sector and advocate for the sector’s key issues at the provincial level in Ontario.



What are the key priorities in the U.S.? The Chamber has just retained a new government relations professional in Washington, D.C. , who is going to lead our U.S policy and legislative efforts. New legislation recently passed in the United States (Vessel Incidental Discharge Act) will provide a platform for CMC and its industry partners to move closer to their goal to have a common ballast water management standard for the entire region. CMC will be working hard with policymakers to ensure that the new regime is harmonious with Canadian rules under development – and most importantly operationally and economically achievable. We will also be helping our members access funding programs as U.S. (and Canadian) governments advance their infrastructure investment plans, and supporting solutions for additional icebreaking capacity, e-navigation and ports’ needs.


What other plans does the Chamber have? We have a ton of communications activities in the works to support our government relations and promote our industry. The Chamber is launching a new website that will be a valuable resource for marine shipping stakeholders and will have a new members-only portal to improve communication with our members. We recently launched a digital advertising campaign aimed at educating

federal politicians and civil servants, and we have a number of speaking events lined up throughout the year. We are also really keen to expand our annual data-collection efforts so we have a more up-to-date and richer set of ‘facts and figures’ and related research to support our advocacy and public awareness efforts. Marine has a great story to tell. And after 60 years, we remain immensely proud to be able to share the stories of our members — who are always looking for new ways to deliver for their customers, ensure the safety of their people and protect the environment in which they operate.


• Originally called the Great Lakes Waterways Development Association •

Founding members: The Steel Company of Canada, Dominion Foundries & Steel Limited, Toronto Elevators Limited / Upper Lakes Shipping, Canada Steamship Lines Limited, The Ontario Paper Company Limited

• The Chamber has had 11 Presidents – the first being Lt. Gen. Howard Douglas Graham who later became the President of the Toronto Stock Exchange. • CMC’s first full-time President, Raymond Johnston, was appointed in 2000. •

The roots of the new organization also go back to the original Dominion Marine Association of ship owners, founded in 1903.




An innovative binational waterway prepares for future challenges BYJULIE GEDEON


he St. Lawrence Seaway is embarking on its 60th anniversary with innovative technology and renewed infrastructure that will soon welcome a lot more vessel traffic from around the world. Its administrators continue a stellar model of binational collaboration that began some years before the system officially opened June 26, 1959, with some 20,000 people in attendance. Since then a vessel traveling between St. Lambert, south of Montreal, and Lake Erie seamlessly crosses the Canadian-American border 27 times. Craig Middlebrook, the deputy administrator at the U.S. Saint Lawrence Seaway Development Corporation (SLSDC) for 23 years, says he’s continually impressed with the level of integrated binational cooperation. “About every five years, someone on either side of the border examines the Seaway model as a potential solution for a multijurisdictional governance question,” Middlebrook says. “The latest is U.S. Sen. Lisa Murkowski who has introduced a similar model as legislation for a multijurisdictional waterway that borders Alaska.” Seaway collaboration has paid off for both nations. An economic impact study completed last July indicated that shipping on the Great Lakes-St. Lawrence Seaway portion of the Waterway supports 237,000 Canadian and U.S. jobs and $35 billion in business revenues. Middlebrook and his Canadian counterpart, Terence F. Bowles, the president and CEO of the St. Lawrence Seaway Management Corporation (SLSMC), credit the foresight of earlier legislators. Those politicians saw the importance of giving the Seaway administrations a clear mission to move vessels efficiently and safely, but also the flexibility to make good business decisions to keep the system competitive and reinvest in its long-term success. As a result, the Canadian and U.S. Seaway authorities have continued to invest in the research, development and ultimately implement various technologies, such as electronic charting and later automatic vessel identification, and draught optimization. The latest technological improvement is the hands-free mooring (HFM) that has been installed at all the major Canadian locks and will be part of both U.S. locks by autumn. 15

Policy “HFM is the biggest technological advance since we modernized our vessel traffic control system with an automatic identification system back in 2001,” says Bowles. “It fundamentally changes the way ships move through the system by replacing wire lines with double-pads that lock into place.”

Technology reducing transit times On the U.S. side, there’s already a noted difference at the Eisenhower Lock where HFM was installed last September. “We’re finding – and this is a conservative estimate – that we’re saving five to seven minutes per lockage,” Middlebrook shares. “That might not sound like a lot, but when you add that up over the course of a round-trip Seaway transit, we estimate a three- to four-hour saving in transit time.” Such time savings can garner the interest of project cargo shippers that account for an increasing proportion of the Seaway’s use, as well as justin-time breakbulk and containerized traffic. “We also expect cruise traffic to increase,” Middlebrook adds. “And HFM shaving three to four hours off a Seaway transit makes a huge difference to cruise operators.”

Fewer work days lost to injury The primary goal has been to modernize the system to make it easier and, above all, safer to use. “If you look at the severity of the accidents we’ve had since implementing HFM over the past three years, the number of work days lost to injury has been reduced by a factor of five,” Bowles notes.


Photo Credit: Algoma Central Corporation

“It’s also easier for captains now who don’t need to have crew on deck to handle lines,” Bowles says. “And the new computerized Seaway jobs are a better match with what young people want to do as work.” The largest difference is expected to be the number of vessels that call upon the Seaway once HFM is installed at the second U.S. lock. “There are currently about 800 ships worldwide that are properly equipped for the Seaway,” Bowles explains. “Once we’ve eliminated the need for special fittings, that number will climb to 8,000, which will definitely help us to attract new business.” “A number of companies abroad have already expressed interest,” Middlebrook adds. HFM at the 13 Canadian locks has cost approximately $100 million, but the payback is proving to be fast with operating expenses reduced by 13 per cent and fewer claimed injury days. The modernization has also facilitated the rebound in Seaway traffic that has accompanied the economic recovery. “We did almost 41 million metric tons of cargo last year, which gets us back to the levels prior to the huge financial crisis in 2008,” Bowles says. Bowles was appointed to the SLSMC in 2010 to improve business operations and safety. “We had to reduce operating costs to compete for limited tonnage with rail, trucks and Mississippi barges,” he recalls. The SLSMC now operates, maintains and controls the Canadian side of the system on a not-for-profit basis that involves covering all operating costs along with approximately 30 per cent of asset reinvestment. From its operating budgets, the Seaway has contributed about a third of

the $1 billion in asset renewal since the Canadian side’s commercialization 20 years ago. “We have a well-maintained and modernized system ready to handle additional capacity,” Bowles says. “Plus we’ve worked at optimizing the season to open 10 days earlier than two decades ago.” Confidence in the system’s future is evidenced by a 2015 study indicating that Canadian and U.S. governments together committed almost $750 million in Seaway investments. Altogether, public sector stakeholders and private entities (including the Seaway, ports, carriers and terminal operators) have invested almost $7 billion in asset renewal and infrastructure along the Great Lakes-St. Lawrence waterway. “Nothing speaks louder as when people are willing to spend their money,” Middlebrook says. “So there’s no bigger vote of confidence in the Seaway as it celebrates its 60th anniversary.”

Other changes on horizon Other changes are on the horizon. “We’re just starting to look at voyage management from origin through to destination and back out of the Seaway,” says Middlebrook. Pilots and others involved in vessel movement would be able to log into the system to verify when exactly their services are required. Ship captains would know when a lock is occupied longer than anticipated and could slow steam for a period to arrive just as the lock clears. “It’s a significantly more complex approach that will require the involvement of more stakeholders as well as data, but the potential gains in efficiency from a real-time dynamic tracking system are enormous,” Middlebrook says. n

In Conversation


LOGISTEC CORPORATION The Logistec brand is widely known in Canada and the United States throughout the Great Lakes, St. Lawrence, East Coast and Gulf Coast regions. But it’s much more than a vast network of stevedoring facilities, increasingly encompassing innovative environmental services. In an exclusive interview, Madeleine Paquin, president and CEO, talks business expansion and the supply chain industry’s challenges. BY LEO RYAN

How would you describe the over-arching vision of the company? The LOGISTEC family’s success is built on its fundamental values of reliability, sustainability, imagination, and the need to go beyond. Above all LOGISTEC is about people working together with a common vision: to be the provider of choice for safe, sustainable and creative solutions in our specialized marine and environmental sectors. It’s our combination of expertise, resourcefulness and most importantly imagination that allows us to tackle today’s complex challenges and makes us unique in the industry. For years, the Logistec name was mainly associated with stevedoring facilities in the Great Lakes, St. Lawrence and East Coast regions. Logistec’s network recently expanded to 61 terminals in 37 ports with two strategic acquisitions in the Gulf — Gulf Stream Marine (Houston) and Pate Stevedore (Pensacola). What lies behind the growing presence in the U.S. market?

LOGISTEC is totally unique. The LOGISTEC family has been around since 1952. Our success can be traced back to our visionary founder, my father Roger Paquin. His innate drive, his ambition, his commitment to going beyond for his customers and uncanny flair for predicting changes in the industry, has carried through this generation. This has enabled LOGISTEC to thrive over 65 years in a constantly evolving marine industry. We offer a unique combination of marine and environmental services. With over 2,400 people across North America spanning from the cold Arctic, to Montréal, now down to the U.S. Gulf. Throughout our history, we strove to increase and strengthen our operations through organic growth and business acquisitions. This remains the case today. We are investing in our future. We are very excited about our future in our three cargo-handling activities: container, bulk and general cargo. In 2018, we made very strategic acquisitions: Gulf Stream Marine and Pate Stevedoring. Great new assets – covering an important geographic

area for our expanding network, and both led by excellent teams. With these acquisitions, LOGISTEC has now definitively established a stronghold in the Gulf of Mexico. We continue to strengthen our position in Canada, as well as in the United States. At the end of the day, what made us focus on the U.S. Gulf Coast was the opportunity to open new markets for our customers. We will continue to listen to our customers and work closely with them to find the right opportunities. The financial performance of Logistec has been especially impressive in the past few years, with consolidated revenue in 2017 surging well beyond C$400 million for the first time (in fact, totaling a record C$475.7 million) and the 2018 numbers on a similar trend line. What factors have contributed to this success? As I was saying earlier, we have been investing in our future. We have made smart investments over the years which have created a solid foundation and led to our 17

In Conversation

Viau Terminal at Port of Montreal.

current success. We also have made bold moves with our investment in water technologies to respond to the growing need for improvement and replacement in water infrastructure across North America. Ultimately, our drive to go beyond and seize opportunities is what is, and what will continue to be, the key to our success. Finding skilled manpower has in recent years emerged as one of the biggest challenges in the global marine industry. What are your views on this? All of us today are challenged to find the best talent. But, the pool is getting smaller and companies are working harder than ever to fill key positions. So, it is no longer about job creation. It is about attracting and retaining talent. And this has never been more important than in our industry. Is our industry sufficiently a magnet for talent? Well, according to an SCM World survey of over 500 supply chain professionals, the task of attracting sufficient numbers of talented millennials into the supply chain is an uphill battle. I may think our industry is very cool, but most surveys do not support my theory! It’s time to rebrand our industry to attract the next generation. 18

The new generation will play a major role in our industry – they will help us because they think differently. How is our industry going to respond to the challenge of always getting better, more competitive, more customer friendly, more fluid, if we can’t attract bright people to our industry? We need to make supply chain an attractive and exciting career option for passionate young talent who might otherwise choose to work in other industries. We need to do this pro-actively. Finding ways to transfer knowledge and expertise to the next generation and developing younger millennials in a way that keeps them engaged, are critical issues for us supply chain leaders. We also need to better understand this new generation. The millennials grew up with smart tools in their hands, like iPads, practically from birth. Among millennials that we are today introducing to the LOGISTEC family, there is so much we can harness. Armed with their iPads and connected to the world, the young millennials are positive and embracing innovation, sharing, and collaboration for the greater good. We need more of this spirit on the waterfront. Where do you see Logistec’s marine services moving in the future in terms of innovation and new technologies?

There are significant opportunities to build on the creative ideas and solutions that the young millennials are presenting to us. We will need to be more flexible and learn to collaborate even more. As a result, it is our customers that will truly benefit from these innovative solutions. What are the main government or regulatory policies that are most impacting your business at the moment? As an entrepreneur with years of experience, I have learned that there will always be new regulatory changes. Like any disruption, we need to be quick on our feet and develop new logistics solutions and supply chains to help our customers reach their business objectives. If you could ask the federal government for one policy or change to facilitate the growth of the marine shipping industry in the Great Lakes-St. Lawrence Region, what would it be? I do not believe that one policy will make the difference. We need to roll up our sleeves and work closely with all key stakeholders on both sides of the border to develop complementary policies and programs that facilitate growth and recognize the marine industry’s significant environmental and social benefits.

In Conversation

Today, environmental services, notably rehabilitating water mains in North American cities have become as important as marine services for Logistec’s overall business. What has driven this innovative path?

Working closely with Montreal, a city known for its innovative mindset, our team was able to demonstrate the value of this technology. We are now helping cities like Toronto, New York and others.

Do you know that every day, nearly 6 billion gallons of drinking water are lost due to leaking pipes? The aging drinking water infrastructure is a major challenge for communities across North America. Our scientists developed a technology to respond to this reality.

F i n a l l y, s o m e t h o u g h t s o n Logistec’s Arctic supply operations that have been active since 1998 through its subsidiary NEAS (Nunavut Eastern Arctic Shipping). Do you see this sector expanding?

• Founded in 1952 by Roger Paquin, Montreal-based Logistec Corporation is a publicly-traded company with operations in marine and environmental services today employing 2,400 people across North America spanning from the Canadian Arctic to the East Coast and the U.S. Gulf. • Madeleine Paquin has been president and CEO since 1996. She has been awarded numerous accolades over the years,

including most recently being inducted into the International Maritime Hall of Fame and being appointed a Member of the Order of Canada.

• Subsidiary Logistec Stevedoring’s network comprises 61 terminals in 37 ports. This network expanded significantly in 2018 through the strategic acquisition in the U.S. Gulf region of Gulf Stream Marine and Pate Stevedore.

We are optimistic. Northern communities rely on marine resupply operations to receive up to 95 per cent of their goods. We are pleased to see that the Government of Canada is focusing on the health of our Arctic coast and enhancing the safety and security of these resupply operations. The LOGISTEC family including NEAS and Sanexen are working with local communities, Inuit and Indigenous peoples to come up with sustainable solutions that make sense for the environment and most of all for the families that live there. n • The Logistec facilities work with all types of cargo, including bulk, breakbulk, containers and project cargo. • Subsidiary Sanexen Environmental Services, which offers a wide range of services through innovative technology such as Aqua-Pipe, has notably rehabilitated many water mains in North American cities.


Canada’s economy is poised for steady growth. The Port of Montreal is uniquely positioned to help propel it forward. Thanks to our lauded ship-to-rail model, innovative smart facilities, and visionary Contrecœur expansion project, we’re already the leading port for transatlantic shipments and a rapidly growing player in trade with Asia. Isn’t it time you turned our international success into your local victory?



February 12, 2019

Smart Ships


Canadian carriers adopting new digital technologies BY LEO RYAN


n a world shipping environment where it’s largely a question of innovate or perish, such Canadian carriers as CSL Group and Algoma Central Corporation are pioneering new technologies on and off ships to render their operations smarter, safer, more efficient and generally more competitive. As of this coming summer, 16 ships in CSL’s Great Lakes fleet will be outfitted with a CSL-developed digital infrastructure known as O2 that will enable “connected vessels”. The O2 technology provides a continuous link between vessels and a digital system ashore that records vessel


data every 10 seconds and combines it with compliance, traffic, voyage, weather, and geographical data. “This digital link allows information, like bridge condition and ETAs, to be shared in real-time to and from vessels. O2 also automates the production of real-time dashboards and reports,” says Frédéric Jauvin, CSL vice-president of global technical services.

Deploying Wärtsilä’s Lock Entry System This shipping season, CSL will also be trialing Wärtsilä’s lock entry assistance system that will ease the approach and entrance of vessels into waterway locks

like those of the St. Lawrence Seaway. The technology, which was installed on the CSL St-Laurent in July 2018, uses global navigation satellite systems (GNSS) to accurately measure a ship’s location as it enters a lock. Speed adaptive controls, together with the allocation of the thruster and rudder, ensure that the vessel enters the lock in a consistent manner every time, while minimizing the influence of external forces from wind and current. In addition, the system automatically controls the vessel’s lateral position and heading, allowing the operator to focus on controlling the speed of the vessel during entry.

Smart Ships

The technology aims to reduce physical contact with the canal’s approach walls, thereby reducing steel damage and steel repair costs. “While commissioning of the technology on CSL St-Laurent will be completed later this year, the lock entry system has so far surpassed expectations. During commissioning trials, the ship stopped to within 2 cm of the designated location,” notes Jauvin.

Algoma testing autonomous shipping technologies For its part, Algoma has begun to test autonomous shipping technologies.

The company has installed AutoMate software developed by Buffalo Automation on one vessel and plans to install a second unit in the near future. While these units are currently being tested, they could be installed on more vessels, if successful. The Automate system is essentially a collection of sensors and cameras to help boats operate semi-autonomously. The system’s inventors point out that if a ship arrives early or late, it may idle or waste fuel – adding to costs. Algorithms and sensors could be used to interpret weather and seafaring conditions, and automatically adjust speed to meet a scheduled time.

Algoma is also currently developing bridge/front end software to reduce the administrative workload on board. This will enable crew members to focus more on critical navigation tasks. “Algoma is often an early adopter of promising technologies,” stresses Gregg Ruhl, President and CEO at Algoma. “We continually strive to drive innovation to improve safety, reduce our carbon footprint and provide the right tools so our crew members can do their jobs safely and efficiently.” n



Smart Ships

GREAT LAKES: World’s first freshwater test site for autonomous ships BY LEO RYAN


s the concept of innovative, smart ship technology c o m m a n d s m o re a n d more global attention, a recent pioneering initiative on Lake Superior in Michigan is making waves. When the new Marine Autonomy Research Site (MARS) was launched last August at the Great Lakes Research Center in Houghton of Michigan Technological University (MTU), David Naftzger, executive director of the Conference of Great Lakes and St. Lawrence Governors and Premiers was so enthusiastic he went so far as to declare: “Shipping will look different in 25 years, largely because of the work done here.” While the future will tell on how far things will go, MARS is now serving as

the world’s first freshwater location for testing unmanned (autonomous) surface and underwater vessels for operation in Great Lakes and U.S. coastal waters. The dedication ceremony drew representatives from the office of Michigan governor Rick Snyder, the Conference of Great Lakes and St. Lawrence Governors and Premiers, the Smart Ships Coalition, several Great Lakes shipping companies, legislators, the U.S. Coast Guard and Transport Canada. The Michigan Office of the Great Lakes, under the umbrella of the state’s Department of Natural Resources, has assisted with the development of the testing area which extends within a 30-mile radius of the university’s

waterfront campus. This region is currently served by the university’s highaccuracy, real-time global positioning system (GPS). The region encompasses the Keweenaw Peninsula’s Portage Canal and substantial Lake Superior shoreline and waters. The area allows technology to be tested where it will not interfere with commercial shipping or recreational boating. Significantly, too, the dedication of MARS represented a major achievement for the Smart Ships Coalition established by the governors and premiers in 2017. Its 24 members today support cross functional working groups to accelerate the adoption of autonomy in marine environment operations. The membership ranges from academic


Photo Credit: Mars-Action


Smart Ships

and government institutions to such marine-related enterprises as Interlake Steamship Company.

alongside data captured from an overhead quadcopter drone.

The launch ceremony featured a demonstration highlighting advanced autonomous technology on the Portage Canal. A small surface vessel captured the contours of the bottom of the canal, and an autonomous buoy was demonstrated capable of maintaining position and moving when needed. More recently, Travis White and Guy Meadows from the Great Lakes Research Center, scientists and researchers from MUT and the University of Michigan, “took advantage of Lake Superior’s notorious fall weather pattern” to conduct a multi-day field experiment. This involved a motion-capturing jet ski, large waves and a seasoned U.S. Coast Guard heavy weather surfboat operator.

An autonomous mission from the MARS test bed to Isle Royal and back is in the planning stages with the U.S. National Oceanic and Atmospheric Administration for this coming summer and will deploy a Liquid Robotics Wave Glider. The small surface vehicle will be outfitted with scientific data logging sensors to help scientists gain a better understanding of Lake Superior’s vast, cold-water environment.

The test was the final validation of the team’s preliminary work on a Seaworthiness Through Intelligent Trajectory Control project. The experiment was designed to investigate

On the horizon


one of the foremost limiting factors for autonomous vessel use – surviving rough waters and extreme weather conditions without operator intervention. The test vehicle’s onboard sensors help to generate accurate wave maps

Meanwhile, White points out, the Smart Ships Coalition is working closely with the U.S. Coast Guard on developing operating guidelines for autonomous vessels in the Great Lakes. He explains: “Current maritime regulations (COLREGs) do not specify how autonomous vessels fit into the big picture of ships and other vessels at sea.” n

Ontario, Canada

Toronto 3.5 hours Ottawa 1 hour Montreal 2 hours U.S.A. 1O minutes New York City 6.5 hours

Eastern Ontario’s Premier Port Tel.: 613.925.4228 23

Environmental Innovation

RIGHT WHALE PROTECTION Industry, government and scientific community collaborate to save whales BY JULIE GEDEON


he efforts to avoid collisions between ships and North Atlantic right whales last year have been deemed successful with no known vessel strikes within Canadian waters. “I applaud the shipping industry’s efforts, which I know come at a cost,” says Moira Brown, the Canadian Whale Institute’s chief scientist. “Based on the mammals photographed, about half of the estimated 400 existing right whales populated the Gulf of St. Lawrence last year with no known collisions – a really positive result.” Canada implemented the slowdown measures in the Gulf of St Lawrence last April 28th through November 15th, 2018, to prevent a repeat of the previous year when 16 right whales had been found dead – 12 of them in Canadian waters. Many of the deaths were attributed to fishing gear entanglements and some also to vessel collisions. Last year’s measures set a speed limit of 10 knots for vessels 20 metres or longer over a static zone that covered most of the Canadian waters off New Brunswick to the Magdalen Islands and from Prince Edward Island to Quebec’s North Shore. Within the static zone, four dynamic zones were delineated in alignment with existing shipping lanes – three south of Anticosti Island and one to the north. Vessels only had to slow to 10 knots in these zones if a right whale had been detected or if Transport Canada could not conduct two surveillance flights within a seven-day period. When surveillance wasn’t possible, a slowdown was instituted for 15 days as a precaution. No whales were spotted within the dynamic zones. However, slowdowns were in effect within one or more of the dynamic 24

zones for approximately 20 per cent of the time last year mainly because surveillance could not take place due to weather. The Chamber of Marine Commerce and other maritime organizations hope this 20 per cent can be reduced.

Photo Credit: Nick Hawkins

Improve Monitoring “We’re delighted there were no known collisions last year,” says Paul Topping, the Chamber’s director of Regulatory and Environmental Affairs. “However, we want to see monitoring improve so that when we slow down it’s because whales are present. Slowing down comes at a significant cost and challenge, as vessels run on schedules to supply Quebec’s North Shore communities, deliver bulk commodities, or fulfil cruise itineraries.” The slowdowns not only make journeys longer but can launch a domino effect. “If a ship misses scheduled time to take on a pilot, meet stevedores or other services, the crew encounters more delays, as well as likely late fees and overtime charges,” Topping explains. “Oceanex estimated its losses for the 2017 season when a constant 10 knots were in force throughout the region at $3.4 million, and that’s just one company,” he adds. Transport Canada conducted 325 flights between last April and November 26 to survey right whales – 222 of them over Quebec’s Gulf of St. Lawrence region and 123 over the Atlantic. The majority flew over the dynamic zones. “We had 23 days last year when the weather prevented aerial surveillance,” recalls Louis Armstrong, Chief – Intelligence, Surveillance and Reconnaissance, Aircraft Services Group at Transport Canada. “Additionally, there were 13 days when the weather hampered patrols of dynamic zones A, B, C and/or D.”

Acoustic gliders are being tested to see if they can detect right whales. Photo Credit: Nick Hawkins

Environmental Innovation

Use of drones Transport Canada tested a drone for a few weeks last year as one possible way to enhance surveillance. “The intention is to continue the testing over whale aggregations this summer to refine the detection algorithm,” Michelle Sanders, Director, Clean Water Policy, Environmental Policy Group, Transport Canada, relates. “A more precise algorithm would reduce the literally thousands of images taken by the drone that had to be reviewed upon retrieval.” Drones could be operated on many of the rough weather days that ground aircraft. “They can also detect whales when there are large whitecaps because their camera faces straight down over the water rather than at the oblique angle that we have aboard a plane,” Armstrong says. In fair weather, regular surveillance over Quebec and Maritime waters is assured by Transport Canada’s purchase of a new Dash-8 with the latest detection technology. “This addition to our existing fleet of three this season ensures flights will continue even if a plane is called away for surveillance elsewhere or requires maintenance,” Armstrong says. Fisheries and Oceans Canada continues to collaborate with university scientists in testing acoustic detection technologies. Gliders equipped with voice recognition software can ride water currents in most any weather. Improved gliders can now track whales 100 kilometres (60 miles) away at up to 200-metre (656-foot) depths. Lithium batteries allow them to operate for up to three months with sufficient power to surface and transmit data. However, they cost about $150,000 each. Further testing is also being done to ensure they are capable of detecting right whales in particular because the species doesn’t vocalize as much as others. Stationery hydrophones are likewise being considered, but their limited range attached to buoys tend to restrict their use to narrower channels. “The cable costs may also be substantive given the necessary distance to a shoreline and the need to run cables along a seafloor or riverbed to prevent mammal entanglements,” Topping adds. The $167.4 million in funding announced last June as part of Canada’s five-year Whale Initiative will go towards continuing to improve the research about endangered whales and their surveillance. Transport Canada is also using a small portion of its $85 million

to research the economic impacts of the slowdowns. “The first phase, completed in February, is more of a case study examining supply chain impacts to communities, including any indirect effects, for example, on tourism,” Sanders shares. “The second phase is a longer term cost-benefit analysis of the measures that will be more of a full economic analysis.”

2019 Protection Measures Announced On Feb. 7, Transport Minister Marc Garneau made a joint announcement with Jonathan Wilkinson, the Minister of Fisheries, Oceans and the Coast Guard, regarding the 2019 measures to protect right whales. The measures continue to protect right whales while permitting ships to maintain their schedules and fuel efficiency. The protective measures will be implemented between the same dates as last year, but only one surveillance flight a week will be required to keep a dynamic zone open for most of the season. A single flight will be required within the first two weeks and later the last two weeks of the season for the zones to stay open. The change takes into account the data indicating the presence of lower numbers of whales at the beginning and end of the season. Changes were also made to the static zone’s boundaries. The southeast corner will be adjusted to permit the open passage of vessels serving the western Magdalen Islands. In the northeast region, dynamic zone D will be extended north of Anticosti Island to Quebec’s North Shore. While maintaining whale protection, the changes are expected to reduce unnecessary speed restrictions and provide vessels with greater flexibility in resupplying Quebec’s North Shore communities and the western Magdalen Islands. Bruce Burrows, the Chamber’s president, welcomed the adjustments. “We are pleased that the Canadian government has made some refinements that will increase delivery efficiencies to communities that depend on marine transport, while continuing to protect the endangered right whales,” he said. “It goes to show the kind of results that can be achieved when government, industry and the scientific community work together.” n 25

Port Innovation



Photo credit: Montreal Port Authority


astern Canada’s largest container port is looking at blockchain-enabled technology to streamline shipping through its facilities. The Port of Montreal has joined TradeLens, a digital shipping platform developed by IBM and Maersk, whose container vessels call in Montreal. The port has been integrated into the pilot project as an early adopter. The platform is expected to be fully commercially available this year. Simply stated, blockchain is a type of electronic notary that encrypts information in a single place. How does it work? IBM describes it as follows: As each transaction occurs – and the parties agree to its details – it’s encoded into a block of digital data and uniquely signed or identified. Each block is connected to the one before 26

it and after it – creating an irreversible, immutable chain. Blocks are chained together, preventing any block from being altered or a block being inserted between two existing blocks. Exclusively dedicated to freight transport, TradeLens enables members to securely share major transactions through real-time access to shipping data and shipping documents. Its aim is to improve data sharing and quality, and facilitate the movement of goods, ultimately leading to more efficient and secure international trade and a streamlining of the administrative process. The advantages could be significant considering that a container transit from point of origin to point of destination leaves a large paper trail and can involve hundreds of emails and dozens of organizations, meaning the

administrative cost of moving a box can outweigh the actual transportation cost. Through better visibility and more efficient means of communicating, Maersk and IBM say that some supply chain participants estimate they could reduce the steps taken to answer basic operational questions such as “where is my container?” from 10 steps and five people to, with TradeLens, one step and one person.

Enhancing business intelligence “Imagine an end-to-end container journey from, for example, Shenzhen, China, all the way to Chicago via Montreal,” says Daniel Olivier, the Montreal Port Authority’s (MPA) Director of Business Intelligence and

Port Innovation


Innovation. “Through TradeLens, every milestone related to the actual container transit – loaded to vessel, vessel departure, vessel arrival in port, container discharge, loaded to railcar or truck, out gate – is recorded into a single blockchain platform.” A second layer of information in the TradeLens platform is all of the documentation that follows the container transit, such as packing lists, bills of lading and letters of credit. “The blockchain is a single repository for all of the information related to a container transaction,” Olivier underlines. IBM, as the central administrator, provides access privileges to members involved in the supply chain; information is shared only on a need-to-know basis. As part of the project, the port is collaborating with terminal operator Montreal Gateway Terminals Partnership, which handles Maersk vessels in Montreal. The port is providing data on Maersk vessel and container movements, and this data is being integrated into the platform.

Montreal is unique in North America in that it is a destination port where container ships are completely unloaded and then reloaded again. Each vessel call requires close coordination with landside transportation services. The MPA operates its own railway network on port territory and relies on accurate, timely upstream information to ensure fluid rail operations. The port is hoping that TradeLens will allow it to enhance and improve its business intelligence and short-term forecasting for better landside resource planning. “Maersk has pretty much 100 percent of the container milestones,” Olivier says. “They can track the container from end to end. We now have the capability of seeing upstream information of all inbound Maersk containers that are coming our way once they are recorded into the system. This will be very precious information for us as a rail planner to provide railcars. Having this upstream visibility adds value to us as a port.” The port will assess the full value of the TradeLens data through March.

STEER toward SUPERIOR MARINE education and training. • • • •



“With TradeLens, the Port of Montreal will be better able to control delivery and operation schedules, provide easier access to clearance and billing documents and bring greater fluidity, efficiency and transparency to international shipping,” noted Jack Mahoney, then President of Maersk Canada when it was announced in October 2018 that the port was joining the program. A second perspective of the pilot project involves the Canada Border Services Agency (CBSA). It is evaluating the capacity of TradeLens to determine what role, if any, the platform could play in its business processes. “TradeLens could create a singular, trusted digital supply chain for all shipments entering Canada,” says CBSA President John Ossowski. “The TradeLens pilot gives us an opportunity to not only find process efficiencies and gain analytical insights, but improve data providence, accuracy and targeting capabilities.” n 1.866.468.3225

Trade Winds

Photo Credit: Antwerp Port Authority Port of Antwerp is Canada’s leading European maritime trade partner.



or many years, Canadian federal governments have been attempting to reduce the country’s overwhelming reliance on its giant neighbour to the south as an export market through trade diversification strategies. Today, the U.S. still accounts for about 75 per cent of Canada’s total exports versus 84 per cent in 2002. But ports on the east and west coasts as well as in the Great Lakes/St. Lawrence waterway are now benefitting from more business and new global shipping lines stimulated by free trade agreements signed in the past few years.

28 28

Two major free trade accords in the past two years give Canadian exporters close to full tariff-free access to a total market of more than one billion people in the 28-country European Union and in the Trans-Pacific region. Implemented since September 2017, the Comprehensive Economic and Trade Agreement (CETA) allows Canadian exporters to tap into a market of 512 million people across the Atlantic. The so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership, concluded in early 2018 with 11 countries including Japan (but not China and the United States) represents a market of 495 million consumers.

On the West Coast, thanks to rising trade with Asia, such carriers as HapagLloyd and MSC have been expanding their services to Vancouver, Canada’s largest port, and Prince Rupert - sparking record volumes in containers and certain bulk products. The world’s biggest container shipping firm, Maersk Line credits the potential business CETA offers as the key reason for recently bolstering its services with eastern Canadian ports.

CETA’s ‘favourable wind’ “Confident even in the early days of CETA’s implementation that it would act like favourable wind in both directions,


Maersk Line decided to add our ownoperated string connecting Montreal and Halifax with the Mediterranean,” Jack Mahoney, president of Maersk Line Canada, said in an interview. He added that the Med/Montreal Express service “offers Canadian exporters and importers another option to the Mediterranean that uses Canadian ports rather than U.S. ports.” Hamburg-Sud also recently introduced a new service linking Montreal to the Mediterranean. Such developments fuelled records in both total and container cargo for the Port of Montreal in 2018. Overall cargo reached 39 million metric tons while container traffic increased by 9 per cent to 1.6 million 20-ft-equivalent units (TEUs). The port attributes the strong performance to a large degree to “the dynamic economic ties between Canada and the European Union, strengthened by CETA.” TONY BOEMI, VICE-PRESIDENT OF GROWTH AND DEVELOPMENTS, EXPECTS MONTREAL’S CONTAINER THROUGHPUT WILL APPROACH 1.7 MILLION TEUS IN 2019. ONE IN EVERY FIVE CONTAINERS HANDLED AT THE PORT OF MONTREAL COMES FROM OR GOES TO THE PORT OF ANTWERP, THE SECOND LARGEST IN EUROPE. .

According to Global Affairs Canada, latest available figures show Canadian exports to the EU up by 3 per cent

while imports from the EU are up 13 per cent - suggesting that Canadian exporters must take diversification more seriously. Interestingly enough, Germany has emerged as the EU country that exports the most to Canada ($18 billion). The UK remains Canada’s leading European trading partner, but is losing ground amidst the growing business uncertainty over Brexit.

Great Lakes/Seaway horizons Eyeing prospects of European trade with the Great Lakes and St. Lawrence region, Amsterdam-based Spliethoff five years ago launched the only scheduled liner service, the Cleveland Europe Express, to and from the Great Lakes. Its multi-purpose vessels carry containers, bulk and project cargo and call on a spot basis at ports like Thunder Bay, Trois-Rivières and Valleyfield. Valleyfield, on the St. Lawrence Seaway near Montreal, was also recently selected by Hamburg-based Compass Logistics to inaugurate a new monthly service to and from Rotterdam, Europe’s biggest port. “As a result, we expect to see an increase in general cargo trade with Europe in 2019,” says JeanPhilippe Paquin, general manager and CEO of the Port of Valleyfield. Canada’s largest Great Lakes port in Hamilton is also seeing the positive effects of CETA on cargo flows.

“For us, the first impacts of CETA are showing up in the form of increasing volumes of Ontario-grown corn being exported to Europe,” notes Ian Hamilton, president and CEO of the Hamilton Port Authority. “Corn exports through the Port of Hamilton more than doubled, from 483,751 metric tons in 2017 to 1,159,366 metric tons in 2018.” Hamilton stresses that the port’s growth in corn tonnages forms part of a broader trade diversification trend. Overall, more than 3 million metric tons of cargo was exported through the Port of Hamilton in 2018, a number that increased by 64 per cent over 2017’s export total. The Port of Hamilton is now home to three grain export terminals, operated by Richardson International, Parrish & Heimbecker and G3 Canada Ltd., creating some of the best export capacity in Canada. “Our role is to ensure we have the trade-enabling infrastructure in place to allow Canadian businesses to be nimble, and seize new opportunities as they arise,” Hamilton explains. And referring to the steel and aluminum tariffs introduced by the Trump administration, he concludes: “As the U.S. turns inward, attracting retaliatory tariffs as a result, Canadian exporters have benefited from our country’s free trade orientation. Through agreements like CETA, we are diversifying our markets and growing a more resilient economy.” n 29

Port Innovation

PORT OF CLEVELAND – Choosing An Alternate Path to Protect the Environment BY WILLIAM D. FRIEDMAN


s recently as five years ago, the maritime industry in Cleveland was facing a crisis that threatened to shut down commerce at the Port of Cleveland – putting at risk $3.5 billion in annual economic activity and more than 20,000 jobs. The problem wasn’t the specter of tariffs, labour issues, or anything one might traditionally suspect – the threat was sediment, and where to put it while keeping commerce flowing and local water sources clean. As context, consider that every year, the U.S. Army Corps of Engineers (USACE) must dredge more than 200,000 cubic yards of sediment from the Cuyahoga riverbed to keep maritime business moving in Northeast Ohio. But recently, finding a place to dispose of that dredged material had become increasingly difficult. Traditionally, it was placed into confined disposal facilities (CDFs), but this method was at risk because the CDFs were nearing capacity. 30

At the time, some in government suggested simply dumping the sediment into the open waters of Lake Erie. This was a no-go in the view of the Port of Cleveland and many other stakeholders due to serious environmental risks from past industrial contamination of the Cuyahoga River. (This situation was made infamous 50 years ago in a 1969 river fire that played a key role in the creation and passage of the Clean Air and Water Act of 1972). The other option often cited for dealing with the sediment was constructing a new CDF – but at a price tag north of $150 million, this solution was cost prohibitive and lacked a source of revenue to support it. We at the Port of Cleveland were convinced there had to be an alternate path – one that protected the environment, but avoided the immense cost of a new CDF and still kept business, cargo, and jobs moving through Cleveland Harbor and the Cuyahoga River. Through strategic visioning and some innovative problem solving, the Port developed a threetiered plan to address the problem:

1. Beneficial Use The Port partners with government, non-profits and businesses to find opportunities to use sediment that traditionally had been permanently placed in CDFs. This includes newly dredged sediment and sediment previously placed in the CDFs. This sediment is then sold to the construction market – for use such as roadbuilding materials and for infill in demolition. The goal is to sell between 50,000 to 100,000 cubic yards annually – between 25 per cent and 50 per cent of what had previously been placed in the CDF annually.

2. Drying & Stacking Sediment Instead of leaving it in a slurry, the Port now dewaters sediment before placing it in the CDF. This reduces the total volume that must be stored, and it also allows vertical stacking to take advantage of CDF airspace. Our CDFs were created by pile driving steel to create huge basins, and when sediment in slurry form reached the brim of the basin, the CDF’s useful life was over. Drying and stacking allows us to radically decrease the footprint of CDF space consumed by newly placed sediment.

3. Future Upstream Sediment Interception The Port placed a testing device known as a “bedload interceptor” upstream on the bottom of the Cuyahoga River. It collects significant amounts of larger sediment before it makes its way into the shipping channel. Pursuing this largely automated process has the potential to help decrease the amount of sediment that enters the shipping channel by 10 per cent to 20 per cent annually, making a large dent in the problem through a passive device with minimal cost. This integrated, holistic management plan has completely transformed the way we deal with sediment and largely eliminated the threat posed by a lack of CDF capacity. We are now five years into implementing our strategy, and we expect it to extend the useful life of our existing CDFs by up to 50 years. We have also begun to share methods with others in the hopes that it can be a beneficial model for dealing with dredging well beyond Cleveland. n

Look Ahead



BMO Capital Markets Senior Economist Robert Kavcic gives his forecast for the region’s economy and the major sectors supported by marine shipping.


soften this year, but broader economic conditions in these provinces remain historically strong. Most U.S. states in the Great Lakes-St. Lawrence Region are also expected to moderate after a surge in business confidence and higher investment lifted growth over the past two years. For the region overall, we expect 1.9 per cent real GDP growth in 2019, versus 2.2 per cent last year. TRADE WARS


he Great Lakes-St. Lawrence region is a vital driver of North American economic output, employment and trade, accounting for roughly a third of combined Canadian and U.S. output, jobs and exports. The region’s economy has had a solid run, but is likely to moderate in 2019 as growth in most of North America fades back toward longer-run norms. Overall, consumer spending and housing activity are slowing in latecycle fashion, while monetary and fiscal stimulus (particularly on the U.S. side of the border) is fading. On the Canadian side, firmer business investment in Central Canada would act as a buffer. Against that backdrop, U.S. economic growth is forecast to decelerate to 2.4 per cent this calendar year, down from a 2.9 per cent pace in 2018. Growth in the second half of the year should be running around 2 per cent. Canada is expected to moderate to 1.8 per cent, a second consecutive leg down after a 3.0 per cent surge in 2017. Central Canada is cooling with growth in both Ontario and Quebec expected to

Trade tensions are perhaps the most important factor heading into 2019, given that the Great Lakes-St. Lawrence region accounts for more than half of all Canada-U.S. cross-border trade. While it still has to pass through Congress, the USMCA deal removes a major cloud of uncertainty from the business sector. Ontario business confidence could benefit the most, with nearly 83 per cent of shipments from the province flowing south of the border. Meantime, the steel and aluminum tariffs have had some impact in the sector, but not enough to hurt Quebec’s (a large producer) economy more broadly. The trade dispute with China is the bigger issue for the region, especially on the U.S. side. Some firms in agriculture have been directly impacted by tariffs; others in manufacturing have faced higher steel input costs. Interestingly, cargo volumes on the St. Lawrence have benefited from the Canada-Europe trade deal, and some rerouting of supply in the wake of U.S.-China tariffs—2018 volumes rose to the highest level since 2007.

AUTO SALES DOWN The auto sector has softened, with U.S. sales levelling off around the 17.5 mln annualized level. While this is a strong level, consumer demand has clearly run into some late-cycle constraints. Meantime, Canadian sales have retreated from record highs, posting the first annual decline in 2018 since the Great Recession. As a result, overall North American production dipped for a second consecutive year in 2018, and we expect continued softness this year. Part of this reflects late-cycle dynamics, while part reflects an ongoing structural shift in production away from Ontario and the Midwest, toward the Southern U.S. states and Mexico—GM’s Oshawa closure is a prime example. Broader factory activity has ebbed as well, consistent with much of the sector cooling after a strong run through 2017 and 2018. Indeed, regional manufacturing surveys in Chicago and Milwaukee have shifted down from cycle-high readings for new orders and employment, suggesting more moderate growth this year. HOUSING MARKET COOLING The housing market is cooling on both sides of the border. In the U.S., higher mortgage rates, fading pentup demand and tax reform that has increased the after-tax cost of homeownership for most buyers have weighed broadly across most markets. Homebuilders have reported less traffic, but resale home price growth 31

Look Ahead

Real GDP (% change)


2018E 2019F

United States Canada Great Lakes-St. Lawrence

2.2 2.9 2.4 3.0 2.1 1.8 1.9 2.2 1.9

Great LakesSt. Lawrence Region Ontario 2.8 2.4 Quebec 2.8 2.3 Illinois 0.4 2.2 Indiana 1.8 2.6 Michigan 2.2 2.7 Minnesota 1.6 1.6 New York 1.9 2.0 Ohio 1.6 1.6 Pennsylvania 2.2 2.1 Wisconsin 1.3 2.4 Source: BMO Capital Markets Economics

2.0 1.9 1.8 2.2 2.3 2.2 1.6 1.8 1.7 1.9

continues in the low single-digit range. Meantime, Toronto’s market continues to absorb the impact of Bank of Canada rate hikes, the provincial government’s Fair Housing Plan and stricter federal mortgage rules that took effect at the start of 2018. Demographic and job-market fundamentals across Southern Ontario remain strong, however, and prices have stabilized. Montreal arguably now boasts the strongest market in the region (London and Windsor are making a bid too), with a solid job market and increased nonresident interest driving 6 per cent price growth. All told, the longevity of the housing cycle could well be determined by how much interest rates rise from here—we currently expect two rate hikes from each of the Federal Reserve and Bank of Canada in 2019. Population flows mark one stark difference between the Canadian and U.S. sides of the region. In Ontario, for example, the population grew 1.8 per cent in 2018, matching the fastest pace in 28 years, driven by international and interprovincial inflows. At the other extreme, Illinois’ population is in outright decline, with the 0.3 per cent drop the weakest of the post-war era. As such, we continue to see firmer underlying potential growth on the Canadian side of the Great Lakes-St. Lawrence border. The Bottom Line: The Great Lakes-St. Lawrence region’s economy is moderating, true to late-cycle form. But, with central banks in the U.S. and Canada expected to tread cautiously in 2019, the expansion should continue, albeit at a slower pace than seen in the previous two years. n


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Look Ahead

ECONOMIC OUTLOOK: Industry executives in the know give their forecasts for the 2019 shipping season and share their upcoming ventures

JOE CAPPEL, VICE-PRESIDENT OF BUSINESS DEVELOPMENT TOLEDO LUCAS COUNTY PORT AUTHORITY The 2018 shipping season successfully concluded slightly ahead of the 2017 season at the Port of Toledo. The port handled more ocean vessels in 2018 than any year since 2006, due primarily to grain exports and project cargo shipments. Overall, grain was up nearly 40 per cent as U.S. soybeans shipments shifted from Asia to Europe. Toledo also exported distiller dry grains for animal feed for the first time via vessel during the season. Dry bulk was another sector that saw significant growth due to increases in salt, petcoke and other aggregates. The port continued to improve and modernize infrastructure replacing water lines and planning for the replacement of several warehouse buildings in 2019. Additionally, the Toledo Shipyard was awarded a small shipyard grant to acquire a heavy lift off-road crane. We expect to continue positive momentum into 2019 with inbound project cargo for the new Cleveland Cliffs Hot Briquetted Iron plant and outbound shipments of grain from the abundant 2018 harvest. n


GEOFFREY WILSON, CHIEF EXECUTIVE OFFICER, PORTSTORONTO For the second consecutive year, the Port of Toronto moved over 2.1 million metric tons of cargo in 2018, which is consistent with the record-breaking year we had in 2017 when we had our best year in more than a decade. This represents the third year in the last five years that the Port of Toronto has moved in excess of 2 million metric tons of cargo. In addition, more than 170 ships visited the Port of Toronto in 2018 bringing sugar, road salt, cement, aggregate and steel directly into the heart of the city. The port saw eight ships bring in a range of steel products including rebar, merchant bar, steel plate and coils totalling 69,281 metric tons, representing the highest amount of steel product moved through the port in 20 years. Further, the port recorded 14,391 metric tons in warehousing storage, the highest level since 2011. We also welcomed 17 passenger cruise ships carrying approximately 6,000 passengers in 2018, highlighting the importance of the ever-growing Great Lakes cruise ship business and the role it plays in contributing to Toronto’s booming tourism industry. In fact, the port is expecting this number to more than double this year with 35 cruise ships coming to Toronto in the summer and fall of 2019. In 2019 and beyond, the port will continue to provide Canadian and international businesses with a convenient, cost-effective and environmentally-responsible way of bringing goods into Canada’s largest city. n

AARON H. DEGODNY, PRESIDENT & CHIEF OPERATING OFFICER, RAND LOGISTICS, INC., WITH OPERATING SUBSIDIARIES LOWER LAKES TOWING LTD. AND GRAND RIVER NAVIGATION COMPANY Customer volume in our 2018 sailing season was very robust. We broke likefor-like monthly and annual tonnage records and had 100 per cent asset utilization. This was in line with the broader market demand that saw Great-Lakes/St. Lawrence traffic hit its highest levels in over a decade. We have a similar outlook for the 2019 season. We expect salt volumes to rebound after a challenging year, along with another strong year for iron ore and aggregate volumes. In addition, we will continue to work on efficiency improvements in order to meet current and future customer expectations. Challenges include dealing with the ever escalating regulatory environment in the Great Lakes which is increasing costs throughout the supply chain, as well as recruiting and developing the next generation of skilled mariners in today’s tight labour market. As vessel carriers, we need to stay engaged in dialogue with various industry bodies, governmental agencies and importantly, our customers, to ensure the long-term viability of our industry. n

PAVING THE WAY ON THE H20 HWY. McAsphalt Marine Transportation Limited (MMTL) specializes in providing marine transportation that goes the extra mile. We pride ourselves in offering our customers the safest, most environmentally friendly and efficient means of transportation “on time, every time”.

Operating two Articulated Tug/Barge (ATB) units, the “Everlast/Norman McLeod” and the “Leo A. McArthur/ John J. Carrick”, on the Great Lakes, St. Lawrence Seaway and 35 Eastern Seaboard.


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