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CONTENTS M A G A Z I N E
Chamber of Marine Commerce EDITORS
Julia Fields and Leo Ryan MARKETING AND BUSINESS DEVELOPMENT CONSULTANT
Sophie Belina Brzozowska
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7 FROM THE PUBLISHER 20 ENVIRONMENTAL INNOVATION On the radar: Protecting marine Canadian ships on track to meet GHG transportation corridors reduction targets 8 Column by U.S. Secretary of Transportation Elaine L. Chao
2020 SPECIAL EDITION
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23 NEWS Pilotage reform: Next steps
9 Message from Minister of Fisheries, 24 Trash talk: Seabin invention helps ports Oceans and the Canadian Coast Guard 26 New Windsor-Detroit Bridge provides Bernadette Jordan opportunities for marine sector 10 WORKFORCE DEVELOPMENT 28 TRADE WINDS Help wanted: Marine shipping LafargeHolcim: Building North American workforce shortages cities with marine transport 12 Canadian Marine Industry Foundation to 29 Laurentia: Quebec’s bold container project promote marine careers 31 ECONOMIC OUTLOOK 14 POLICY BMO Capital Markets’ forecast for the Shipping calls for high water solutions Great Lakes-St. Lawrence Region that protect Seaway trade corridor 33 SHIPPING OUTLOOK 17 IN CONVERSATION Industry executives give their forecasts Duluth Seaway Port Authority’s for the 2020 shipping season Deb DeLuca ADVERTISERS’ INDEX
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Algoma Central Corporation .......................................................................................... Back Cover Canada Steamship Lines ....................................................................................................... Page 3 Green Marine ...................................................................................................................... Page 21 Groupe Desgagnés ............................................................................................ Inside Front Cover HOPA Ports........................................................................................................................... Page 25 McAsphalt Marine Transportation Limited .......................................................... Inside Back Cover Montreal Gateway Terminals Partnership............................................................................... Page 4 Port of Monroe .................................................................................................................... Page 12 Port of Montreal .................................................................................................................. Page 13 Port of Johnstown ............................................................................................................... Page 32 Rand Logistics, Inc. .............................................................................................................. Page 16 Sterling Fuels ....................................................................................................................... Page 22 The St. Lawrence Seaway Management Corporation............................................................ Page 56
The Great Lakes St. Lawrence Seaway System
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ON THE RADAR:
Protecting our marine transportation corridors In spite of the many benefits of the marine mode, however, challenges persist that are completely preventable. Despite very little ice conditions, the opening of the Montreal-Lake Ontario section of the St. Lawrence Seaway was delayed to April 1 this year to accommodate higher outflow at a dam to lower Lake Ontario levels to prevent potential flooding for landowners. These actions will lower the Lake by only 9 centimetres to help the IJC being seen to alleviate a 35 per cent risk of flooding.
BRUCE R. BURROWS, PRESIDENT AND CEO, CHAMBER OF MARINE COMMERCE
s we kick off the 2020 shipping season, it has already become clear that there is much work ahead to protect the future integrity of inland and coastal shipping and its ability to deliver economic and environmental progress for the United States and Canada. Marine trade and transportation corridors like the Great Lakes-St. Lawrence Waterway have a huge impact on the competitiveness of North American industries, while at the same time reducing road congestion and pollution – as is aptly noted by U.S. Secretary of Transportation Elaine Chao in her column on page 8. The important role that marine plays in national trade and job creation is also recognized in a message from Bernadette Jordan, the Minister of Fisheries, Oceans and the Canadian Coast Guard, on page 9.
In contrast to these limited benefits, as much as 100 ship transits supporting up to $100 million in economic activity could have happened between March 20-31, and ship operators were also at the ready to help alleviate the backlogs caused by Canadian rail network and port disruptions in February. The threat of interrupting the Seaway season to increase outflow at the dam was also a major issue in 2019, and in the end, shipping continued but with many mitigation measures that caused delays, lost cargo, and extra operating costs. With climatologists predicting more dramatic swings in precipitation as the “new normal” in the Great Lakes region, going forward we need a much smarter, holistic approach to shoreline resiliency that does not rely on one ineffective dam to solve this problem. In our article on pages 14-15, our customers talk about the real repercussions of interrupting Seaway shipping and we make recommendations to government on next steps. Our cover story on pages 10-11 also addresses another of CMC’s top priorities – attracting and retaining talent in the marine sector. One of our greatest challenges is the lack of public awareness about the well-paying and rewarding careers in both the private and public realms of the marine sector. Our article examines how workforce shortages are affecting Canadian shipping and the initiatives now underway to attract people from all walks of life,
including the Canadian Marine Industry Foundation on page 12, a partnership between private industry and federal government departments. We’re also proud to showcase in Marine Delivers Magazine the continuing efforts of our members to deliver for their customers, ensure the safety of their people and protect the environment in which they operate. On pages 17-19, we have an exclusive interview with Deb DeLuca, Executive Director, of the Duluth Seaway Port Authority, who talks about the port’s expansion projects and recent environmental strides. On pages 20-21, we reveal how Canadian shipowners are on track to meet GHG reduction targets and are investing in eco-ships, biofuels and LNG capability. And our article on pages 24-25 reports on how an invention by two Australian boat builders/water enthusiasts is changing the way PortsToronto and the Port of Hamilton are cleaning up harbour waters and improving waste literacy. Marine shipping also plays an often unsung role in supporting national infrastructure and construction projects. Our article on pages 26-27 shines a light on the sheer volume of materials being delivered by ship to build the Gordie Howe International Bridge spanning from Windsor to Detroit. And our profile on LafargeHolcim on page 28 demonstrates how much this construction giant relies on marine to provide the building blocks of our cities across the bi-national region. We also showcase the ambitious $775 million project by the Quebec Port Authority, CN and Hutchison Ports to build a new container terminal at the Port of Quebec on page 29. As this issue demonstrates, there is so much opportunity with the marine mode for further investment, job creation and environmental innovation. We look forward to working with our government partners and other stakeholders to finding solutions to our challenges so that we can make the most of marine’s full potential. n 7
St. Lawrence Seaway Essential to U.S. and Canadian Economies BY: U.S. SECRETARY OF TRANSPORTATION ELAINE L. CHAO
hen the St. Lawrence Seaway opened the Great Lakes to global trade 60 years ago, it set the stage for regional economic growth. Celebrating its 60th anniversary last year, the Great Lakes-St. Lawrence region is now an industrial and agricultural transportation hub for both the United States and Canada – with a combined GDP of more than $6 trillion U.S. dollars. More than 238,000 jobs and USD $35 billion (CAD $45 billion) in economic activity are supported by movement of cargoes on the Great Lakes–St. Lawrence Seaway System. The St. Lawrence Seaway has promoted trade by lowering transportation costs. 8
Each ship carries as much cargo as 963 tractor-trailer trucks, and does so with seven times more fuel efficiency. This saves $3.6 billion per year in transportation costs, while reducing highway congestion and pollution. It has been a factor in the creation of 7 million jobs since President Donald Trump’s election. The St. Lawrence Seaway’s emphasis on safety, improving operations, and investing in infrastructure reflects the U.S. Department of Transportation’s top three priorities. The Department’s first priority is safety. The second priority is improving infrastructure, and the third priority is preparing for the future by
engaging with new technologies to address legitimate public concerns about safety, privacy, and security, without hampering innovation. The Seaway encourages innovation. It was the first inland waterway system to adopt the Automatic Identification System and integrate it with a Traffic Management System. This GPS- enabled system has entered worldwide use. The Seaway is now developing a new traffic management system that harnesses “big data” concepts. This is a joint effort with the Canadian Seaway and the Volpe National Transportation Systems Center in Cambridge, Massachusetts to develop a new vessel traffic flow management system. This system could be a groundbreaking advance in managing, scheduling, and predicting vessel traffic in the Seaway. The goal is to provide precise and accurate voyage planning for each vessel transiting the entire Great Lakes-St. Lawrence Seaway System. Over the past 10 years, the Seaway’s Asset Renewal Program has invested $161 million in 55 different projects. One example is the innovative HandsFree Mooring (HFM) system. The HFM systems are installed on both American locks and 13 of the 15 locks in the Seaway. The HFM systems save 3 to 4 hours per Seaway transit. HFM not only increases transit safety and efficiency, it allows a broader variety of ships to use the passage. The old mooring system required ships to be specially outfitted for the Seaway mooring system. This was expensive and limited the number of vessels that could transit the Seaway. The elimination of this requirement has increased the number of ships that can transit the Seaway by tenfold. As a result, we are seeing a rise in the first-time users of the Seaway. n
A MESSAGE FROM
The Minister of Fisheries, Oceans and the Canadian Coast Guard Bernadette Jordan Iâ&#x20AC;&#x2122;m honoured to extend personal greetings to readers of the 2020 edition of Marine Delivers Magazine.
he familiar red and white hulls of the Canadian Coast Guard fleets are part of our national heritage, and a reassuring symbol of service and safety. Canadians can be very proud of the women and men who work hard every day to protect our coasts, keep our economy moving and people safe. On any given day, they respond to search and rescue missions, maritime security calls, and icebreaking operations. Last Spring, the Government of Canada announced the single largest investment ever made to renew the Canadian Coast Guard fleet, with up to 18 new large ships and the construction of six new icebreakers. We are outfitting the Coast Guard with modern equipment and the right tools needed to deliver on icebreaking operations, escorts, and ice-management services â&#x20AC;&#x201C; all while creating good jobs and economic opportunities that will extend across the country. The Coast Guard delivers services on the longest coastline in the world, including the Atlantic, Pacific and Arctic. In the Great Lakes and the St. Lawrence Seaway they help ensure uninterrupted trade through this important link to global commerce. And we will continue working hand-in-hand with our many partners to ensure these areas remain secure, safe and prosperous. It is also our responsibility to ensure equal opportunities for all Canadians. Women around the world are now working and excelling in seafaring and maritime careers, with record numbers in senior roles. There is still much work to be done but I am proud of our Coast Guard for being inclusive and focused on recruiting a diverse workforce that is representative of the Canadians we serve. Sincerely, The Honourable Bernadette Jordan Minister of Fisheries, Oceans and the Canadian Coast Guard
Marine shipping workforce shortages spreading BY LEO RYAN
he alarm bells are ringing louder and louder over an increasing manpower shortage in Canada’s marine transportation sector, where some 200,000 Canadians work on ships, in ports and provide marinerelated logistics services. It’s not only the lack of enough superior officers like captains, first mates and chief engineers to meet demands but also entry-level seafarers. It’s a problem that is echoed in the world’s shipping centres from Greece to London to Hong Kong. “Despite the many perks that marine offers – great salaries, interesting and varied work, technology-driven – labour and skills shortages are an acute problem in the marine sector,” says Bruce Burrows, President and CEO of the Chamber of Marine Commerce, whose membership includes shipping lines, shippers, ports and marine suppliers in Canada and the United States. “Many of our members have identified workplace development as their number one challenge.” The Canadian Transportation Act review in 2015 found that Canadian seafarers are aging and the pool of qualified seafarers is diminishing, not just in Canada but throughout the Western world. “The problem has become even more acute, such that Canadian ship operators have had to tie up ships because they cannot crew them and call back Captains and First Mates from
retirement and leave,” Burrows adds. Labour shortages have also hit public agencies like pilotage authorities and the Canadian Coast Guard with the private and public sectors competing against each other within the same small labour pool. In January, the marine industry joined forces with the federal government to establish the Canadian Marine Industry Foundation (see separate report on page 12), to promote careers in the marine sector and help alleviate labour shortages. The Chamber of Marine Commerce is one of the founding partners. “This is an opportunity to take a more strategic national approach to let Canadians know that marine is a dynamic, modern sector committed to innovation, sustainable best practices and ongoing skills development,” Burrows explains.
Labour shortages impacting economic growth The overall predicament in Canada was demonstrated in striking fashion last summer shortly after Quebec City’s Groupe Desgagnés held an inauguration ceremony for two leading-edge polar class duel fuel/LNG petroleum-chemical tankers custom-built for the company in Turkey. They represented the completion of an investment plan in excess of $200 million CDN launched in 2015 for four such state-of-the-art vessels. The new generation tanker vessels costing approximately $50 million each are the result of an original concept to optimize safety, environmental performance and operational efficiency as well as to adapt
to navigational conditions in northern Quebec, the Saint-Lawrence and the Great Lakes regions. The fuel system actually makes it possible for those vessels to use either conventional bunker fuel, diesel fuel or liquefied natural gas (LNG) as a fuel. But one of the four state-of-theart-of-the-art vessels, the MT Rossi A. Desgagnés could not begin trading once it arrived in Canada as planned because Groupe Desgagnés was simply unable to find qualified Canadian mariners with required certificate of competencies in sufficient numbers to crew the vessel, in keeping with Transport Canada regulatory requirements. For Groupe Desgagnés, the ripple effect of such an acute crew shortage was financially very costly, with the company operating only three of its four new product tankers simultaneously, as it juggled with available mariners. “We switched to another ship and moved crews from one ship to another for two months,” explained a senior executive. “This had several million dollars of economic impact.” During those two months, the company had no choice but to resort to temporarily importing foreign flagged vessels to deliver oil products to its customers in the St. Lawrence and Arctic regions, a time consuming and costly undertaking.
Reciprocal recognition accords with France and Norway Up until recently, Canadian marine industry interests have not taken advantage of provisions already built-in
Workforce Development to the Canada Shipping Act that allows the signing of bilateral agreements between Canada and foreign countries, providing for swift reciprocal recognition of certificates of competencies issued to mariners from those two countries. But that has changed recently. Transport Canada late in 2019 concluded bilateral agreements with Norway and France. As a result, Norwegian and French mariners will be allowed to work on a Canadianflagged vessel with a work permit, without having to apply for permanent residency. Those mariners must still satisfy Transport Canada’s checks to ensure they have acceptable and up-todate certificates of competencies from their home maritime administrations. Groupe Desgagnés has approached hundreds of candidates during an extensive company recruiting drive principally in France, in addition to continuous Canada-wide recruiting efforts to hire Canadian mariners. To date, some two dozen European mariners were thus signed up, conditional on their getting work permits or permanent residency. While conducting a recruiting campaign in Canada and principally France, Groupe Desgagnés made available ‘on-thejob’ training opportunities for cadets enrolled in marine related academic programs in Canadian institutions: in 2019 alone, this translated into more than 10,000 work days on a Groupe Desgagnés vessel. Lastly and just as importantly, Groupe Desgagnés donated $300,000 CDN to the Fondation de l’Institut Maritime du Québec at Rimouski, thus committing to the continued development of future generations of young Canadian mariners. Claude Mailloux, executive director of the Quebec City-based Human Resources Sectorial Committee of the Maritime Industry, agrees that bilateral agreements with Norway and France are a step in the right direction though “not a miracle solution.”
Globally speaking, the latest manpower report by BIMCO and the International Chamber of Shipping (ICS) put the current shortfall at about 16,500 officers (ie. navigation and marine engineering officers) and warned there will be a need for an additional 147,500 officers by 2025 to service the world merchant fleet. There are over 50,000 merchant ships trading internationally that are served by an estimated 1,647,000 seafarers of which 774,000 are officers. Whereas the global supply of officers is forecast to increase steadily, this is predicted to be outpaced by rising demand. Some categories are in especially short supply, including engineer officers at the management level and officers for such specialized ships as chemical and LNG carriers. The report suggests that in the past five years the industry has made progress in increasing recruitment and training levels. But it warns that training levels must be boosted significantly.
Stepping up recruiting efforts Mailloux raises another point: the marine sector is competing with such other industries as mining, energy and manufacturing for mechanical engineers. To attract more young people to pursue careers as seafarers, Mailloux’s Sectorial Committee has launched an EMBARQUE campaign which makes wide use of social media. Canada’s marine industry, in fact, offers attractive well-paying careers. Typical deckhands start off at $60,000 to $80,000, depending on the vessel. For second mates, it can reach $120,000. And higher still for first mates and masters. But these are not 9 to 5 jobs, requiring mariners to be on the water for one, two or up to three months before having blocks of time off.
In an interview, Phillip Nelson, president of the Vancouver-based Council of Marine Carriers, explains that tug operators are not yet experiencing too much difficulty in obtaining people to fill entry level positions, but the situation will change in the future as it becomes more and more difficult to attract mariners prepared to be away from home several weeks at a time. To encourage new entrants, the Council is looking at establishing a marine apprenticeship which would provide free funding for the required schooling and seagoing assignments. In a related development, the Seafarers’ International Union of Canada initiated a Be A Seafarer recruitment campaign in 2018 aimed at promoting seafaring careers for younger generations of Canadians amidst a manpower shortage and aging membership. “The SIU offered free education to select applicants of our programs and a guaranteed job upon completion of the proper marine course,” explains Patrice Caron, SIU executive vice president. While the response was strong and hundreds of applications have been received, Caron acknowledges that the industry is facing a new shortage in the form of engineers and officers on board Canadian vessels. An estimated 25 per cent of the SIU members – who represent the majority of unlicensed mariners in Canada - will also be retiring over the next five years, and less than 13 per cent of the membership is under 30. In the recruiting drive, the Seafarers Training Institute is working in partnership with the SIU, Algoma Central Corporation, Canada Steamship Lines and Groupe Desgagnés. Meanwhile, it’s a virtually identical story at such specialized training schools as Georgian College and the Institut maritime du Québec in Rimouski: relative stability in the number of cadets recruited for nautical programs but a constant decline in engineering students. n
CANADIAN MARINE INDUSTRY FOUNDATION Launched to promote marine careers
Marc Garneau Minister of Transport
Kathy Fox Chair, Transportation Safety Board of Canada
“The marine sector is a key part of our transportation system; therefore, it is important that we do everything to ensure key jobs are filled. Transport Canada is a proud member of the Canadian Marine Industry Foundation, a unique forum to address recruitment challenges faced by both the industry and the Government of Canada, which promotes the marine sector as a career of choice.” “At the Transportation Safety Board of Canada, we are always looking to make a safe system even safer. The work we do in the marine mode to advance safety – investigating accidents, identifying safety deficiencies, reporting publicly – requires that our marine professionals be proficient and well versed in their field. The creation of the CMIF will help identify the many opportunities in the marine industry, and will help us continue recruiting and developing the people with the talent and drive to succeed in a challenging but rewarding career.”
The mariners Port. Efficient, economical, and accommodating.
he marine shipping industry in Canada has joined forces with the federal government to launch the Canadian Marine Industry Foundation (CMIF), to promote careers in the marine sector and help alleviate labour shortages. The initiative was formally announced in January of this year. The CMIF was conceived and developed by Canada’s private and public sector marine stakeholders, including the Ottawa-based association Chamber of Marine Commerce, and the federal government under the direction of Transport Canada, the Canadian Coast Guard and the Transportation Safety Board of Canada. The foundation aims to expand its membership to include private and public entities from all coasts in Canada. It will present opportunities for engagement, resource sharing and also direct financial contribution. One of the CMIF’s first initiatives in 2020 will be to launch a digital campaign to raise awareness of the industry so it can continue to attract the skilled labour, trades and accredited professionals needed to steer the industry forward. The campaign will ask Canadians to Imagine Marine and start a conversation to spark the imagination of youth to consider careers in an industry with a tradition and future like no other. A new web-based career resource will be designed to inform, direct and support workforce candidates with academic and career information. The CMIF will not replace or duplicate individual company or departmental recruitment efforts but rather act as a clearing house or one-stop resource that provides the broader picture of everything the marine sector has to offer. “The Canadian Coast Guard is honoured to be a founding member of the Canadian Marine Industry Foundation. It’s integral that the marine sector has a thriving workforce – from entry level straight through to experienced professionals. This initiative will help showcase the exciting and varied positions that exist ashore and afloat that satisfy a wide range of interests and goals,” says Bernadette Jordan, Minister of Fisheries, Oceans and the Canadian Coast Guard. https://cmif-fimc.ca n
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SHIPPING CALLS FOR HIGH WATER SOLUTIONS THAT PROTECT SEAWAY TRADE CORRIDOR BY JULIA FIELDS
igh water levels are wreaking havoc across the Great LakesSt. Lawrence region, damaging shoreline residential, business and port infrastructure and threatening the operation of the bi-national trade and transportation corridor – the St. Lawrence Seaway. During the past year, the rising water levels have continuously led to calls to “open the floodgates” at one dam on the St. Lawrence Seaway to lower Lake Ontario levels. This move would create fast-moving, unsafe currents that would stop marine shipping and cost the Canadian and American economies up to USD $193 million (CAN $250 million) lost business revenues per week – impacting farmers, steel and manufacturing employees, miners and construction workers and the myriad of others whose livelihoods depend on the cargo carried on the waterway.
Moses-Saunders dam has little impact on high water problem Scientific evidence from the International Lake Ontario-St. Lawrence River Board demonstrates that outflow levels at Moses-Saunders dam have little impact on the problem, lowering the Lake by centimetres only to have more water come flooding in from Lake Erie and the other overflowing Great Lakes. During the winter months, the River Board let out as much water as
it could without impacting municipal water intakes, engineering works and causing ice jams. Much of that progress was wiped out by two days of heavy rainfall. Any outflow increase at this dam increases water levels in Montreal (which are also impacted by water from the Ottawa River), and also draws down water levels on Lake St. Lawrence, where extremely low water levels are expected to return. With all the different stakeholders at risk there is often very little room to manoeuvre. The River Board had to adjust outflow levels 28 times just in January. “It’s time for politicians to start working with all the affected stakeholders on smart, effective solutions for high water levels. Shutting down or interrupting Canadian, American and international trade on the St. Lawrence Seaway and further damaging the economy and our nations’ global trading reputation should never be an option,” says Bruce Burrows, President and CEO of the Chamber of Marine Commerce. Twenty-five per cent of all Canadian grain exports transported on bulk vessels travel through the Great Lakes-St. Lawrence River waterway. U.S. and Canadian industries specifically located their mines, plants and grain terminals on the waterway and have organized their entire supply chains around using marine shipping to transport huge volumes of materials and products within North America and to and from overseas.
With one Seaway ship able to carry as much as 963 truck loads, marine shipping is both the most cost-efficient and environmentally-sound option. For many mines, quarries and steel and other manufacturing plants – there is no alternative transportation infrastructure network waiting in the wings. “These businesses will be scrambling to find thousands of trucks to fill the gap at extra cost and/or dealing with shortages and lost business,” says Burrows. “With ships producing 500% less carbon per tonne kilometre than trucks, the sad irony is that interrupting Seaway shipping would actually contribute to exacerbating the problem that many scientists are linking to the huge swings in precipitation in the Great Lakes – climate change.”
Marine shipping is already feeling the pain of high water In 2019, marine shipping worked diligently with stakeholders for a solution to ensure safe navigation at record outflow levels from Moses-Saunders dam for five months to help lower Lake Ontario, taking on 26 mitigation measures that caused shipping delays, lost cargo business and millions of dollars of extra operating costs. Throughout the winter, the Chamber has been working with ship captains, the St. Lawrence Seaway and experts in Canada and the United States to identify technology and further mitigation measures that
could be tested to potentially allow safe navigation to continue at higher outflow levels in the coming season. Despite these efforts, the River Board said it would raise outflow at the dam to unsafe navigation levels, forcing the opening of the Montreal-Lake Ontario section of the St. Lawrence Seaway for shipping to be delayed to April 1 this year. With little ice coverage, Seaway shipping could have started March 20, with as many as 100 ship transits taking place during that 12-day delay.
Calls for action Moving forward, the Chamber is recommending the following actions: • For the IJC and governments (federal, state and provincial) to work with all stakeholders on an action plan that looks at all avenues including shoreline resiliency, flood management zones and other infrastructure investments for residential and business owners. • That the IJC use scientific data to measure the benefit to shorelines of any proposed actions and that these water reductions not cause further harm to the U.S. and Canadian economies. • That the ILORB include commercial navigation interests as members, as recent appointees have been made that represent shoreline interests. • That investments be made in marine infrastructure to better inform commercial navigation when outflows are high and currents are fast, including current meters, shoreline mapping and other tools.
STAKEHOLDERS ON THE CONSEQUENCES OF INTERRUPTING ST. LAWRENCE SEAWAY COMMERCIAL NAVIGATION “It disrupts our ability to supply our international customers. Vessel demurrage charges, contract extension penalties and contract defaults are real consequences, as is harm to Canada’s reputation as a reliable supplier of grains, oilseeds and pulse crops throughout the world. We are extremely sensitive to these extra costs, not only for our members but for grain producers and customers. A disruption to the grain supply chain of any length of time means lost shipping opportunities that will never be recovered.” Wade Sobkowich, Executive Director of the Western Grain Elevator Association (WGEA), representing major grain businesses handling in excess of 95% of western Canada’s bulk grain exports.
“It’s important to understand that ships delivering and shipping goods from Great Lakes ports like the Port of Toledo, Ohio are part of a supply chain linking the Midwest to global markets. A disruption in the supply chain would have considerable ripple effect in the many industries we serve including U.S. steel production, aggregates for construction, energy generation, and agricultural exports. Often there are no alternative routes to deliver these commodities.” Thomas Winston, President & CEO, Toledo-Lucas County Port Authority
“The result of such action would be transportation chaos with negligible benefits. A mid-season shutdown of as little as 20 days would send manufacturers and farmers scrambling to find alternative transportation for as much as a million tonnes of cargo at our two ports. If port users could even find alternative transportation, it would likely be a truck, resulting in more than 40,000 new truck trips between the Greater Toronto-Hamilton Area and Montreal at a 500% increase in carbon emissions.” Ian Hamilton, President and CEO of HOPA Ports (Hamilton-Oshawa Port Authority)
“Raising water outflows to levels that would force navigation stoppages or cut the season short would be detrimental to our business. LafargeHolcim relies on Seaway shipping to bring raw materials in from overseas for cement production — materials not available in the U.S. or Canada. Seaway shipping is also the most cost efficient and environmentally sound way for us to transport large volumes of construction materials which are used to build everything from buildings to roads, bridges and airport runways. LafargeHolcim depends on having reliable, uninterrupted transportation on the St. Lawrence Seaway to produce products that serve our customers, which are ultimately people living and working in the Great Lakes-St. Lawrence region.” Chuck Hriczak, Marine Operations Manager, Great Lakes & East Coast/ LafargeHolcim U.S.
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IN CONVERSATION WITH
DULUTH SEAWAY PORT AUTHORITY BY LEO RYAN
THE DULUTH SEAWAY PORT AUTHORITY IS THE LARGEST AND FURTHEST INLAND PORT ON THE GREAT LAKES, ACTING AS A MID-AMERICA GATEWAY FOR DOMESTIC AND INTERNATIONAL TRADE. IN AN EXCLUSIVE INTERVIEW, DEB DELUCA, EXECUTIVE DIRECTOR, COMMENTS ON COMPETITIVE CHALLENGES, EXPANSION PROJECTS, ENVIRONMENTAL POLICY AND CARGO GROWTH.
Since taking the helm of the Duluth Seaway Port Authority in August 2018, what has struck you as the biggest competitive challenges facing the Great Lakes-St. Lawrence transportation corridor?
My work with the Port Authority actually began in 2014, as director of government and environmental affairs, and ever since, I have been nurtured on the narrative that “… the St. Lawrence Seaway is only 50% utilized…,” which generates the eternal question: what are the barriers to increasing System use? For the Port of Duluth-Superior, the
furthest inland port in the system, any extraordinary costs compound over the 2,340-mile journey. Pilotage rates are a contributor to higher costs and create a significant competitive disadvantage as compared to traditional coastal ports – we hear about it from agents, customers, and cruise lines. This has been discussed often, and it bears repeating that pilotage reform is needed to level the playing field. In order to be effective, it should be approached through a collaborative, transparent process involving the U.S. Coast Guard, maritime stakeholders and the pilot organizations in both the United States and Canada. We
must find a solution that, long-term, is beneficial for all, but we haven’t yet found the forum for that process. Additionally, we must also continue to invest in infrastructure renewal, repair and improvement throughout the waterway and its nodes. Looking to the future, the Great Lakes-St. Lawrence system will be at a disadvantage without a more advanced vessel traffic system utilizing ship-to-shore data sharing that optimizes vessel movements and improves system efficiency; this will need to be right-sized to the system and will likely need to be adopted incrementally. 17 17
During your time with the Port Authority, the Port of Duluth-Superior completed $22.5 million USD in infrastructure renewal projects, opened the CN Duluth Intermodal Terminal and launched the Duluth Cargo Connect initiative. What new expansion projects are underway or planned, and is there sufficient space for these developments?
Our organization experienced a great deal of positive change under Vanta Coda’s administration and I’m proud to have been a member of his executive team. We accomplished some major projects prior to his departure to the Ports of Indiana in 2017. I identified two immediate orders of business on becoming executive director eight months after Vanta left. The first was to stabilize the organization (we needed to complete three hires to backfill my position and two others) and cement relations with our board of commissioners. The second was to implement the initiatives that started under Vanta so that we fully optimized those opportunities. That said, last June we did complete a $3.3 million expansion of the CN Duluth Intermodal Terminal, which was in part funded by a grant ($2.2M) that I had coordinated while in my former position. We have plans (and grant applications) in place to add 50,000 feet of warehouse space and rebuild two dock walls totaling 1,800 lineal feet at the Clure Public Marine Terminal. We are also building out 5-6 acres of secured outdoor storage space for our tenants to free up room at the Clure for Duluth Cargo Connect operations. Finally, we are in the process of rehabilitating a 1910-vintage building near the Clure Terminal to become the new Duluth Seaway Port Authority office.
Handling 35 million short tons annually, the Port of DuluthSuperior is the farthest inland port in North America and the largest tonnage Mid America gateway on the Great Lakes for domestic and global trade, driven especially by natural resources cargo led by iron ore and grain. But there has in recent years been a tremendous surge in project cargo handled at Clure Public Marine Terminal, 18
illustrated by a record in wind energy components in 2019. What elements have contributed to this success?
As a project cargo terminal, our opportunities are somewhat dictated by what projects (energy production, mining, manufacturing) are occurring in our admittedly broad catchment area. The U.S. production tax credit on wind energy projects has provided incentive to start and complete wind projects in a particular time window, and we have seen that reflected in wind cargo through the terminal. That said, Duluth Cargo Connect has refined and targeted its marketing approach and is continuing to do so. This has also had a positive effect on our increased freight tons through our terminal.
Cargo diversification has emerged as an increasingly significant feature of port commercial strategy to consolidate the present and build the future. Please describe how your team is seeking to broaden the variety of cargoes within its catchment area, including the movement of container cargo of all types via rail and road.
We’ve been very active in this realm. We are an economic development agency and we have two goals that are inextricably linked. We seek to develop and operate our assets in a way that provides supply chain cost savings to regional industries to keep them competitive in the global marketplace. Also, we seek to increase cargo diversity through our terminal, and through the port. Our agent (Lake Superior Warehousing) and our staff work closely with regional industries to help develop these opportunities. Our operation of the intermodal terminal, including our value-added services, has enabled regional industries to save up to a third on their freight costs. We have customers who are exporting finished product for the first time, as well as customers who are able to reach markets that they couldn’t before. All of these examples represent new cargos through our terminal, but they also represent increased trade for the region. In all, we
touched six continents with our Duluth Cargo Connect efforts and the Clure Public Marine Terminal in 2019.
From your background and previous tasks at the port, environmental issues figure very high in your priorities, as recognized by DSPA’s strong performance in a report last June by the environmental improvement organization, Green Marine.
DSPA joined the voluntary Green Marine certification program in 2007 to provide a tangible scoreboard for environmental stewardship. By design, the program has grown in complexity and membership over the past 14 years with specific metrics for environmental performance, including greenhouse gas emissions, aquatic invasive species, waste management, spill prevention and community impacts. We are proud to rank among Green Marine’s top 5 port authorities in the United States. In 2020, we continue to be proactive about minimizing environmental impact of our operations and overall maritime commerce. Specifically, we are expanding the complexity of greenhouse gas emissions tracking from our terminal and will set specific reduction goals. From a broader industry perspective, we are focused on aquatic invasive species threats by leading the Great Waters Research Collaborative (GWRC) Advisory Committee at Lake Superior Research Institute.
Close relations between port authorities and local municipalities represent an important factor for mapping the future. How would you describe the current community relations?
We work closely with the City of Duluth on several issues and I feel we have a strong relationship with the city. It’s best to seek commonalities in goals, concerns and desired outcomes and then build from there. The city undertook a revision of its Comprehensive Land Use Plan in 2015 and we participated very deliberately to make sure that the need for the industrial sector in the city’s economy was well understood. We did
• On the tip of Lake Superior, the Port of Duluth-Superior is the largest and furthest inland port on the Great Lakes.
so in a respectful manner, and in fact, contracted a study to gather a set of neutral facts on this topic. I feel that our efforts in this area have helped change the narrative surrounding industrial land use in our city.
During the winter months, Coast Guard services on Lake Superior are vital to ensure safe and efficient navigation. Was there sufficient cutter deployment last winter and are you satisfied there will be sufficient icebreaker capacity (from both U.S. and Canadian coast guards) in 2020?
It’s no secret that the U.S. Coast Guard is challenged by a lack of icebreaking resources dedicated to Lake Superior and the Great Lakes as a whole. The Alder’s home port is DuluthSuperior, but Alder is aging and she isn’t a heavy icebreaker. Only the Mackinaw can serve a heavy
icebreaking role, and the demands on that one vessel, operating out of Cheboygan, Michigan, are extensive. The U.S. Coast Guard deserves huge appreciation and extra kudos for getting the 2019 season underway given the difficult conditions; they did so through shrewd deployment of available resources, careful sequencing and long hours. But beyond the appreciation and kudos, they also deserve congressional support for additional funding dedicated to Great Lakes icebreaking resources. With more robust icebreaking resources, our Coast Guard can open that lane and keep it open with even greater success in the future. In the meantime, we’re hopeful that the existing U.S. Coast Guard assets can endure, and we’re appreciative of any assistance provided by the Canadian Coast Guard. n
• Handles 35 million short tons annually. Natural resources cargo is led by iron ore and grain. But the port also handles significant volumes of project cargo with a record throughput of 306,000 tons of wind energy components handled at Clure Public Marine Terminal in 2019. • The port has completed $22.5 million in infrastructure renewal projects, opened the CN Duluth Intermodal Terminal, and launched the Duluth Cargo Connect initiative. • New expansion plans include adding 50,000 feet of warehouse space, rebuilding two dock walls and building six acres of secured outdoor storage space. • A strong supporter of the Green Marine certification program, the port will continue to be proactive in 2020 in minimizing the environmental impact of operations.
CANADIAN SHIPS ON TRACK TO MEET GHG REDUCTION TARGETS BY JULIA FIELDS
hip operators in Canada have collectively decreased their greenhouse gas emissions by more than 30 per cent since 2005. These reductions align with Canada’s targets to reduce GHGs by 30 per cent by 2030 from 2005 levels and the industry is continuing to adopt a host of new technologies, fuels and ship designs to decrease their carbon footprint even further. “Because marine shipping is already the most carbon efficient mode of transport, and becoming more efficient all the time, it is an important part of the solution to climate change,” says Bruce Burrows, President and CEO of the Chamber of Marine Commerce. “There is great opportunity to move more goods by ship on our inland and coastal waterways and reduce the country’s overall greenhouse gas emissions.” In Canada, the latest emissions inventory published in 2019, using 2017 data, indicates Canadian ship operators account for only 0.61 per cent of Canada’s national CO2 emissions (compared to 0.87 per cent back in 2005). Ships are also able to carry huge volumes of cargo on significantly less fuel than rail and trucks. One ship can carry as much cargo as 963 trucks. On average, CMC’s Canadian-flag fleet can carry one tonne of cargo an incredible 360 kilometres on one litre of fuel. Recent analysis by Research and Traffic Group also shows that due to that fuel efficiency, if rail and truck were to carry the same cargo over the same distance as CMC’s fleet, there would be 31 per cent more GHG emissions from rail and 558 per cent more from trucking. 20
“Our Canadian shipowner members have been trailblazers in tackling greenhouse gases through programs like Green Marine and adopting new technologies,” Burrows explains. “Canadian shipowners have spent more than $2 billion during the past few years on new vessels and advanced technologies that significantly reduce fuel consumption and corresponding carbon emissions. The level of investment and innovation is really unprecedented. There are already more than 40 new and revamped Canadian-flag ships sailing these waters.” St. Catharines-based Algoma Central Corporation, for example, has invested significantly in fleet renewal, building eight new environmentally efficient Great Lakes vessels to date and with additional new builds presently under construction. As a result of these investments and other improvements in vessel equipment and operations, that company is on track to meet its greenhouse gas reduction target.
Testing new equipment and bio-fuel Montreal-based CSL Group has utilized many different technologies and programs to reduce GHG over the years, including fleet renewal programs with six new Great Lakes vessels in Canada, extensive energy efficiency design and retrofit upgrades. Most recently, CSL has retrofitted propeller boss fin caps to vessels, which reduces the amount of power required to propel the ship forward and has had impressive fuel saving results. CSL has also undertaken biofuel trials in its Canadian division. The trials commenced with a B50 product, which is a fuel with 50 per cent bio content made from waste agriculture material. The trial
used the new fuel on the generators of the vessel with successful results and will progress to a B100, 100 per cent bio-content fuel this coming season. Additionally, the B50 will be trialed on the main engine of two vessels in 2020 in the Great Lakes. “This biofuel trial is part of CSL’s strategy for a holistic solution to air emissions, not just meeting the compliance obligations of Sulphur 2020 or NOx independently but rather taking a big picture view in reducing greenhouse gas emissions,” says Nathalie Sykora, Senior Vice-President, Global Operations.
REDUCING GLOBAL SHIPPING GHGS IN HALF BY 2050 The global maritime transport industry has submitted a proposal to the United Nations’ International Maritime Organization to form the world’s first collaborative shipping R&D programme to help eliminate CO2 emissions from international shipping. The proposal includes a fuel levy to create core funding from shipping companies across the world of about USD $5 billion over a 10-year period. The IMO has a goal to reduce global marine shipping’s greenhouse gas (GHG) emissions by at least 50 per cent by 2050, regardless of trade growth. The 2050 target will require a carbon efficiency improvement of up to 90 per cent, and the further development and deployment of new zero-carbon technologies and propulsion systems, such as green hydrogen and ammonia, fuel cells, batteries and synthetic fuels produced from renewable energy sources.
“Because marine shipping is already the most carbon efficient mode of transport, and becoming more efficient all the time, it is an important part of the solution to climate change,” says Bruce Burrows, President and CEO of the Chamber of Marine Commerce. Developing LNG capability Since 2007, Quebec City-based Groupe Desgagnés has invested more than $50 million per year to renew its fleet with more efficient vessels in all its trades. This includes a large investment in Dual-Fuel LNG vessels to reduce its SOx, NOx and GHG emissions. In the last two years, the company has introduced five new Dual-Fuel Tankers that are significantly reducing GHG emissions. “As we were first adopters, many issues emerged, including the lack of delivery structures and network, so we had to innovate and invest a lot of effort in this technological development,” says Daniel Coté, Environmental Advisor for Transport Desgagnés. Desgagnés has also undertaken energy audits on nine of its vessels to identify improved operational measures and reduction projects for better efficiency. Last year, it implemented a list of those operational measures on all its vessels to increase efficiency and reduce of GHG emissions. Over the next five years, the company will continue to implement new measures as part of its goal to decrease its GHG emissions by 2 per cent in intensity each year. n
GREENTECH ENVIRONMENTAL CONFERENCE
June 2 to 4, 2020 — Montréal, Canada
FIGURE 1. CMC Member Fleet Fuel Efficiency 360 km 247 km 45 km Distance in kilometres one metric ton of cargo travels on 1 litre of fuel. Source: Research and Traffic Group analysis
FIGURE 2. CMC Member Fleet Carbon Emissions
558% more 9.2
31% more 12.1
CO2 grams per metric ton/km Source: Research and Traffic Group analysis
INFORMATION AND REGISTRATION green-marine.org/greentech
418 649-6004 21
PILOTAGE REFORM: Next Steps to a Safe, Efficient Pilotage System in Canada BY SARAH DOUGLAS, SENIOR DIRECTOR OF GOVERNMENT AND EXTERNAL RELATIONS, CHAMBER OF MARINE COMMERCE
or the first time in over 45 years, Canada has made sweeping changes to its pilotage regime by passing new legislation overhauling the Pilotage Act. In Canadian ports and other specific waterways, ships are mandated by law to have a specially-trained mariner called a pilot come on board to help with local navigation – this is called pilotage. The rationale is that this pilot will navigate the challenging areas where the ship’s crew may not have travelled often and know the potential hazards. The pilotage system, however, had not been reformed in decades and the costs of pilotage services have been out of control. The Chamber of Marine Commerce was at the forefront, advocating for changes that would increase efficiency of the system, while maintaining the safety of the system. While a new law was passed, these new rules are not yet necessarily put into practice – the process of moving to a new, dynamic pilotage regime is expected to take place over the next few years, and will take place in a few phases. So far, a few key reform elements are in place. For example, service contracts with pilot corporations must be free from subjects that are covered by the government’s regulatory powers.
A brand-new purpose and principles clause in the new law will govern pilotage in Canada. This new language aims to make sure that pilotage services contribute to the safety of navigation, be provided in an efficient and cost-effective manner, that risk management tools be used effectively and that evolving technologies are taken into consideration. It also states that pilotage charges should be set at a level that keeps an authority self-sufficient. These purposes and principles will apply to all facets of Canada’s pilotage regime, and will be important as we move forward in overhauling all of the regulations in Canada that support pilotage. Within the next year, we expect two more key aspects of the new pilotage regime to come into force. First, new provisions on oversight and enforcement of the Pilotage Act will be put in place, which will match enforcement provisions of similar laws in the marine sphere, like the Canada Marine Act or Canada Shipping Act. Second, new ways of setting pilotage charges will be put in place. Pilotage authorities will have to revamp the model they use to set charges, and they won’t have to go through a regulatory process to change their charges. While this model will be more flexible, we are keeping a close eye on it to
Pilotage Reform: Key Milestones
• New Pilotage Act passed • New Purposes and Principles, governance changes in force
• Oversight and Enforcement provisions to take effect • New pilotage charges system to take effect
ONGOING TO • Consultations on new regulatory regime • Transferring regulatory authority to Transport Canada • Development of new national certification system
ensure that authorities standardize their methodologies as much as possible so that pilotage charges are easy to understand, transparent and meet the self-sufficiency of the authority. The biggest reform is going to take the longest - the major regulatory overhaul to the pilotage system is expected to take around two years. In many ways, this is not surprising. With Transport Canada taking the reins of regulatory control and the consolidation of different regulations for each authority under one banner, it will be complex to navigate. The challenge will be to ensure that there are harmonized, national regulations that apply across the country when it comes to ensuring safe navigation. This will take a lot of work, and we believe that the purposes and principles of the Pilotage Act should guide these discussions. It’s also important to keep this in mind as we explore the creation of a national certification system for pilotage to allow Canadian masters to pilot their own vessels. The system in place in the Great Lakes Pilotage Authority’s area is a good starting point, as it has a demonstrated safety record while increasing efficiency. This won’t be an easy process because of the amount of overhaul required, but it an excellent opportunity to move forward to creating a pilotage system that maintains navigation safety, while allowing greater participation of all partners involved to ensure efficient service delivery. n 23
K L A T H S A R T
ario t n O e k a L helps n o i t bris n e e d v f n i o n e i c b r a u Se the so y f i t n e d i s port EDEON BY JULIE G t i p o and st
he debris collector invented by two Australian boat builders/ water enthusiasts is changing the way PortsToronto and the Port of Hamilton are cleaning up harbour waters and improving waste literacy. Andrew Turton and Pete Ceglinski developed the Seabin to collect trash, oil, fuel and detergents from waterways. A pump draws trash into a container attached just under the water surface to a platform or wall. The bag collects up to four kilograms of trash daily, while the absorbent but hydrophobic filter retains hydrocarbons. “It’s simple but effective,” says Chris Sawicki, PortsToronto’s Vice President of Infrastructure, Planning and Environment. PortsToronto became the first North American port to install the recently commercialized Seabin after an employee on its volunteer sustainability committee suggested it to management. “We set up two in the Outer Harbour Marine last summer,” Sawicki says. “And later tested another two at the Inner Harbour’s York Street Slip where the winds and waves are stronger.”
PortsToronto is collaborating with a studentresearch project at the University of Toronto called the Trash Team. The students empty the Seabins and document the waste. “We relate the findings to community decision-makers so they can take steps to prevent the debris in the first place,” says Chelsea Rochman, the Assistant Professor of Ecology and Evolutionary Biology who co-founded the project. As expected, the Seabins retrieved disposable coffee cups, cutlery and cigarette butts. “There’s also a lot of microplastics likely from larger pieces that have broken down over time,” Rochman says. “It’s good to get these out before they break down further and possibly enter the food chain.” Toronto’s construction boom has resulted in many rigid Styrofoam pieces from
packaging and insulation. “There’s an opportunity here to make some changes with the industry to stop this,” Sawicki says. A surprise finding has been plastic micro-pellets used to make new products. “We’re working with the industry to identify how these might be lost during shipping – perhaps falling off trucks or railcars,” Rochman says. “The industry is also looking at putting traps on storm drains.” The industry is collaborating with the students to develop and present a webinar across Canada to make companies aware of the issue and solutions. Improving waste literacy is a key goal. PortsToronto has posted Seabin signs. “We’re hoping people realize the effect of putting something in already overflowing bins or just plain littering,”
Sawicki says. Meanwhile, the Trash Team is visiting classrooms. Gautier Peers, who is in charge of business development for Water Products & Solutions (Seabin’s official supplier), applauds the approach. “Youth are the best influencers,” he says. “The Seabins can also show politicians where there’s a problem.” As of February 1, more than 850 Seabins were in use worldwide. They range between $7,800 and $10,000, depending on the installation required. “They’re always near the surface to avoid interfering with marine life,” Peers explains. “In areas with regular tides or other fluctuations, they must be installed so their level can be adjusted.” The Port of Hamilton acquired its first Seabin last fall. It collected water bottles, plastic wrappers/bags, cigarette
butts, bait containers and other trash during a month-long trial. “We’ll have a full season ahead to track waste,” confirms Emily Paivalainen, the Communications and Community Relations Coordinator for HOPA Ports (Hamilton Oshawa Port Authority). “We’re also in talks with partners willing to fundraise to purchase additional Seabins.” PortsToronto plans to acquire 30 to 40 Seabins over the next two years. It’s also encouraging purchases by municipalities, community organizations, business associations as well as private marinas for other waterfront areas. “We’re hoping a solar-powered model will be available soon to lower costs in locations away from power sources,” Sawicki adds. n
WATE R FRO NTS AT WO R K .
A new integrated port network on the Great Lakes.
WITH MORE FACILITIES, WE CAN SERVE THE GREAT LAKES ECONOMY BETTER.
HOPA Ports is supporting industry in the Golden Horseshoe with more efﬁcient, sustainable multi-modal transportation services.
NEW WINDSORDETROIT BRIDGE provides opportunities for marine sector BY BRENT FREDERICK
he Gordie Howe International Bridge project, the largest infrastructure project along the Canada-U.S. border, is providing opportunities for the marine sector to handle greater volumes of cargo as well as the development of logistics and trade hubs for international traffic. The $5.7-billion project includes a new bridge between Windsor and Detroit and ports of entry (POEs) on both sides of the border. The bridge will deliver needed transportation improvements and handle expected growth through the trade corridor, the busiest commercial land border crossing between Canada and the U.S., accounting for more than 25 per cent of the total bilateral trade between the two countries. A considerable amount of construction aggregate required for the project already has been delivered by ship through the Great Lakes ports of Windsor and Detroit, says Mark Butler, the Windsor-Detroit Bridge Authority’s Director of Communications. “As part of our logistics plan, we seek the most efficient, economical and sustainable way to transport materials to our construction sites, both in Canada and the United States,” Butler says. “The location of the source of materials or parts helps us decide whether railroad, truck transportation, or marine transportation provides the most economical and efficient way to deliver materials.” “Another factor is quantity and size of materials. For large quantities of 26
material, like aggregate, or large-sized items, such as pre-cast concrete, pre-fabricated elements, and other major components, marine transportation can be the most-efficient way to get materials here.” The Windsor-Detroit Bridge Authority (WDBA), a Crown corporation, is responsible for the delivery of the bridge through a public-private partnership. Bridging North America is WDBA’s privatesector partner. The six-lane bridge will be 2.5 kilometres long, have a clear span of 853 metres – the longest main span of any cable-stayed bridge in North America, and directly connect Highway 401 in Windsor with I-75 in Detroit. There will be dedicated truck lanes on the bridge and in the Ports of Entries. Port Windsor has handled hundreds of thousands of tonnes of construction aggregate needed to create a sufficient base for the 53-hectare Canadian POE, the largest plaza of any Canadian border crossing with the U.S. The port is expecting to handle more aggregate for the bridge project along with items such as steel materials and cable, pre-fabricated components, large construction equipment and heavy machinery, and construction materials and concrete. The amounts will be “pretty significant,” says Steve Salmons, President and CEO of Port Windsor.
Salmons says marine is a sound economic and feasible transportation mode for the items required for the project. “Much of the equipment is too large to move by rail or by highway, so invariably it is going to come by water and through our port terminal. We’re going to do everything we can to make sure we get every bit of that business,” he says.
Opportunity for logistics hub While the entire Windsor-Essex region will benefit from the project through 2025, when the bridge is scheduled to open, the real question, Salmons says, is, “What are we going to do about it when it does open? Will this bridge be an economic bypass or an economic lifeline to this community?
Artist rendering of six-lane bridge that will have the longest main span of any cable-stayed bridge in North America. Source: WDBA
“We are uniquely situated in North America, at the nexus of the largest trading relationship and the largest transportation linkage between Canada and the U.S. More traffic, more volume and more dollars flow through Port Windsor, its current bridge, rail and vehicle tunnels and ferries than all other crossings in Ontario (and any other crossing in Canada). Our marine, rail and road transportation systems are all connected. We’re now getting this new six-lane super bridge that connects the Canadian economic lifeline called the 401 to every major highway and market in the Central U.S. How can that not be anything but an advantage and a massive opportunity for us? “At some point there must be an opportunity for a hub of logistics 27
activities, and a hub that is not servicing just the economy or industry of WindsorEssex, but that of Central North America. That’s what the port has seized.”
Port Windsor taking the lead Indeed, Port Windsor is leading a roundtable discussion that is examining how the region can best benefit from the new bridge and become a chief gateway for international trade. “If we don’t ask this question in 2020, seek the answers and use the collective wisdom and genius of this community, in 2025 it will be too late,” Salmons says. “We will wake up and say, ‘Wow, we should’ve thought about this. We should’ve been doing something while they were building this bridge.’
“I’m proud that our board and port authority has taken the lead – the initiative on this in the community. We’re getting overwhelming enthusiasm and agreement that this is what we need to do, and we need to do it now. Because once the bridge opens, logistics patterns and logistics systems will become set and entrenched, and they’re very difficult to break. We all know that if there’s an interruption in a major transportation link, shippers find alternatives. They are very difficult to pull back to their original distribution system.” The roundtable comprises community and business leaders, including transportation industry representatives, plant owners and people who understand the international movement of goods and the “ground game of logistics,” Salmons says. n
LafargeHolcim: Building North American Cities with Marine Transport
afargeHolcim provides the building blocks of our cities – the construction materials used in everything from buildings to bridges, roads and sidewalks to airport runways. And if you live in the eight states and two provinces that border the Great Lakes-St. Lawrence River waterway – it’s likely those materials were transported at some point by ship. “We use Great Lakes-St. Lawrence ships to transport cement and aggregates to many major cities on the Great Lakes, from Superior, Milwaukee, Chicago, Detroit and Buffalo to Windsor, Hamilton, Toronto and everywhere in between,” says Chuck Hriczak, Marine Operations Manager, LafargeHolcim U.S. “Many of our products are used in the nation’s largest infrastructure projects. For example, our company transported aggregates by ship that were used to build the bridge bases in Canada and the United States for the Gordie Howe International Bridge. We also plan to supply cement for the bridge deck.” LafargeHolcim owns a small fleet of cement ships (which are managed 28
“WE USE GREAT LAKES-ST. LAWRENCE SHIPS TO TRANSPORT CEMENT AND AGGREGATES TO MANY MAJOR CITIES ON THE GREAT LAKES, FROM SUPERIOR, MILWAUKEE, CHICAGO, DETROIT AND BUFFALO TO WINDSOR, HAMILTON, TORONTO AND EVERYWHERE IN BETWEEN” by a third-party operator) and also contracts with ship operators to transport aggregates from its four stone quarries in the region. Without marine shipping, adds Hriczak, LafargeHolcim would need to use rail or truck which is less environmentally friendly and significantly increases cost – affecting the company’s competitiveness. Its four stone quarries are completely reliant on water transportation with no rail access. “Marine for us is the most costeffective way to get our quality products to market. It also has the least environmental impact of all transportation modes. That also aligns with our environmental objective to be environmentally conscious,” says Hriczak. “Research studies show ships are more fuel-efficient and produce less carbon emissions per ton-kilometre than rail and trucks.”
Since 1990, LafargeHolcim has decreased its net carbon emissions per tonne of cement by 25 per cent and continues to reduce its footprint by using lower carbon-producing materials, using alternative fuels during production and improving the efficiency of its operations. n
In the United States, LafargeHolcim has more than 400 operating locations and employs roughly 7,000 people. In Canada, the company has 400 sites, employing 6000 people.
LAURENTIA: QUEBEC’S BOLD CONTAINER PROJECT I n a bold move towards cargo diversification, the Port of Quebec has launched a major project called Laurentia to establish a terminal that would significantly broaden its reach on the continent’s industrial heartland by capitalizing on its deep water to attract large container ships. With the opening of an expanded Panama Canal, a new generation of bigger vessels is rapidly appearing on the Atlantic seaboard. The Port of Quebec considers that with water depth of 15 metres, it is strongly positioned to take advantage of the changing landscape in commercial shipping. As Mario Girard, president and CEO of the Quebec Port Authority, puts it: “Quebec City must get on board and leverage its strategic location on the shortest route between Europe and the St. Lawrence-Great Lakes region, which is home to over 40 per cent of the U.S. manufacturing industry.” Currently, Montreal is the only container port in the province of Quebec. The Port of Quebec, currently handling 28 million metric tons of cargo, has been known for decades chiefly as a bulk shipping gateway on the route linking the Atlantic Ocean and the Great Lakes. A water depth of 15 metres at low tide allows for the transshipment of cargo between deep-draft ocean vessels and smaller ships (Lakers) able to travel upriver through the St. Lawrence Seaway locks into the Great Lakes – thereby penetrating a market of more than 100 million consumers, including the U.S. Midwest. The overall business model could undergo important transformation within a few years if all goes according to plan. Girard unveiled the project in late 2017. And he quickly followed this up by hiring as the lead adviser
Don Krusel, who had earned a widelyacclaimed reputation by piloting, as chief executive, the metamorphosis of the remote, struggling Port of Prince Rupert in British Columbia into a fast-growing container port in North America. Costing an estimated $775 million, with a completion date target of 2024, Laurentia would extend the wharf line at the port’s Beauport zone by 610 metres, connect with existing road and rail networks, and house a 17-hectare container yard. With officials continuing their efforts to attract container shipping lines as potential customers, the ambitious project has been reinforced by last May’s announcement by the Quebec Port Authority of a long-term agreement with Hutchison Ports, the world’s largest terminal operator (network of 52 ports) and CN, a leading Canadian railway with a network extending right to Mexico. The project will be financed primarily through the joint investment of the three
partners. And the port is having ongoing discussions with federal and provincial governments to complete the financing package. According to a study from KPMG, for the construction phase alone, the project will generate $500 million in economic benefits and an average of 1,267 jobs a year. Ultimately, the project will generate $84 million in economic benefits a year and will create nearly 800 jobs, including 500 direct ones, in Québec. Meanwhile, before construction can begin, the project must receive regulatory approval in Ottawa from federal authorities. At the time of writing, the project was still under an environmental assessment process with the Canadian Environmental Assessment Agency. n
Great Lakes-St. Lawrence Region:
SLOWDOWN TO STABILIZE BMO Capital Markets Senior Economist Robert Kavcic gives his forecast for the region’s economy and the major sectors supported by marine shipping THE REGION’S ECONOMY CONTINUES TO SLOW DOWN ALONGSIDE BROADER TRENDS IN CANADA AND THE UNITED STATES, AND 2020 WILL BE CHALLENGED BY THE COVID-19 OUTBREAK.
he Great Lakes-St. Lawrence region remains 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 continues to slow down alongside broader trends in Canada and the United States, and 2020 will be challenged by the COVID-19 outbreak.
Consumer spending moderating Overall, consumer spending has moderated, but housing activity has firmed on both sides of the border, counter to typical late-cycle trends. One major reason is that a plunge in long-term interest rates and three Federal Reserve interest rate cuts in 2019 have supported activity. On the flip side, business investment continues to lag, while the virus outbreak is shutting in travel and disrupting supply chains. This is especially important in manufacturing-heavy regions such as the Midwest United States and Central Canada.
Against that backdrop, U.S. economic growth is forecast to decelerate to 1.5 per cent this calendar year, down from a 2.3 per cent pace in 2019. Growth in the second half of the year should be running stronger as activity presumably returns to normal. Canada is expected to grow 1.2 per cent this year, with Ontario and Quebec remaining strong spots. Most U.S. states in the Great Lakes-St. Lawrence Region are also expected to moderate—growth for most peaked in 2018. For the region overall, we expect 1.3 per cent real GDP growth in 2020, versus 1.7 per cent last year and 2.0 per cent in 2018.
USMCA ratified, China still uncertain Trade policy is an important factor in 2020, given that the Great Lakes-St. Lawrence region accounts for more than half of all Canada-U.S. crossborder trade. That said, President Trump’s signing of the USMCA deal, and an expected quick ratification in Canada, 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. The trade dispute with China is the bigger issue for the region, especially on the U.S. side. But, similarly, the Phase One trade deal signed late last year has finally steered talks on a more positive course. If this continues ahead of the 2020 U.S. election, it would be good news for the business sector.
Manufacturing ebbing The auto sector has softened, with U.S. sales levelling off around the 17 mln annualized level. While this is a still-solid level, consumer demand has clearly run into some late-cycle constraints. Meantime, Canadian sales have retreated from record highs, posting a second consecutive annual decline in 2019. As a result, overall North American production fell for a third consecutive year in 2019, 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.
U.S. homebuilder confidence at new highs The housing market is firming on both sides of the border, largely driven by last year’s plunge in long-term interest rates. U.S. mortgage rates have fallen by 100 bps over the past year, while five-year fixed rates in Canada are near cycle lows. U.S. homebuilder confidence has rebounded to new highs, outpacing even levels seen at the height of the boom in 2007. Various policy measures 31
Economic Outlook to cool markets in Southern Ontario have faded, while demographic and job-market fundamentals across Southern Ontario remain strong and price growth has accelerated. Meantime, Montreal arguably now boasts the strongest market in the region (London and Windsor are making a bid too), with a strong job market and increased nonresident interest driving 7 per cent price growth. All told, the longevity of the housing cycle has been extended by recent central bank rate cuts. After the Federal Reserve and Bank of Canada each cut rates by 50 bps in early March, we expect an additional 50 bps of easing by both central banks through the middle of 2020. This is largely in response to the COVID-19 impact. Population flows mark one stark difference between the Canadian and U.S. sides of the region. In Ontario, for example, the population grew 1.7 per cent in 2019, matching the fastest pace in almost 30 years, driven by international and interprovincial inflows. At the other extreme, Illinois’ population is in outright decline, with the 0.4 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, assuming productivity growth remains relatively stable. The Bottom Line: The Great Lakes-St. Lawrence region’s economy has moderated along with most of North America, and the COVID-19 impact will weigh heavily on growth through the first half of the year. But, with trade
uncertainty ebbing, interest rates down, the expansion will likely continue, and we should see growth firm again through the latter stages of the year. Real GDP (% change) 2018 2019e 2020f United States Canada Great Lakes-St. Lawrence
2.9 2.3 1.5 2.0 1.6 1.2 2.0 1.7 1.3
Great Lakes-St. Lawrence Region Detail Ontario
2.2 1.7 1.3
2.5 2.8 1.4
2.1 1.6 1.0
2.0 0.8 1.8
2.5 2.0 1.3
2.6 1.5 1.5
1.9 1.7 1.4
2.0 1.5 1.2
2.4 1.3 1.1
Source: BMO Capital Markets Economics
3.5 hours 1 hour
Montreal 2 hours U.S.A.
New York City 6.5 hours 32
Eastern Ontario’s Premier Port Tel.: 613.925.4228 www.portofjohnstown.com
SHIPPING OUTLOOK : Industry executives in the know give their forecasts for the 2020 shipping season and share their upcoming ventures
TERENCE C. BOWLES PRESIDENT AND CEO, THE ST. LAWRENCE SEAWAY MANAGEMENT CORPORATION The 2019 tonnage results on the Seaway reflected the more challenging conditions encountered last year as compared to 2018, in which Seaway tonnage was at a 10-year high. Trade tensions, difficult navigational conditions due to very high water flows within the St. Lawrence River, combined with adverse weather conditions impacting grain harvests, all served to restrain total cargo volumes. There is little doubt that trade tensions certainly were felt within the shipping industry, and we earnestly hope that the implementation of the USMCA (the revised US-Canada-Mexico trilateral free trade agreement) will be one of several improvements within the global trading arena, providing for a better cargo outlook in 2020. With those improvements in mind, we are optimistic that Seaway tonnage in 2020 will exceed the 2019 total of 38 million tonnes. n
TIM HENEY CEO OF THUNDER BAY PORT AUTHORITY The 2019 shipping season in the Port of Thunder Bay featured notably higher cargo shipments than the past several years. Strong shipments of prairie-grown grain and other dry bulk commodities from Western Canada buoyed the port’s cargo tonnage to 9.3 million metric tons, the highest since 2014. Grain volumes increased by 500,000 metric tons this year as Thunder Bay elevators funneled larger quantities of canola to markets in Europe and South America. Coal tonnage hit a seven-year high, while potash shipments remained above average for a third-straight year. Both the foreign and domestic vessel fleets contributed to the strong season in Thunder Bay; vessel calls and cargo tonnage for both fleets were up compared to the prior year. The Port of Thunder Bay is projecting another strong season in 2020. Thunder Bay grain terminals continue to set the bar for efficiency, producing the fastest railcar and vessel turnaround times of all Western Canadian grain ports. A highlight for the 2020 season will be increased shipments of wind turbine cargoes for Western Canadian wind farm developments. n
ADAM SCHLICHT DIRECTOR OF PORT MILWAUKEE Cargo travelling through Port Milwaukee increased significantly in 2019 led by growth in all major dry bulk categories. Increases included 10 per cent more cement, 20 per cent more limestone, and 56 per cent more salt. Overall, combined tonnage reported in 2019 from both public and private facilities at Port Milwaukee was up 11 per cent, totaling over 2.6 million tons. Port Milwaukee’s total activity in 2019 exceeded its five-year and ten-year average tonnage performance. Port Milwaukee anticipates further activity in 2020, including increased utilization of the Port’s fully refurbished liquid bulk pier, currently operated by U.S. Venture/U.S. Oil. The Port has significantly increased its position as the premiere turnaround cruise ship port-of-call on the western edge of the Great Lakes. The Port recently received an over $15 million grant from the U.S. Department of Transportation, which will help build a new Maritime Agricultural Export Facility at the Port. n
SYLVIE VACHON PRESIDENT AND CEO, MONTREAL PORT AUTHORITY
PAUL C. LAMARRE III PORT DIRECTOR, PORT OF MONROE
In 2019, for the sixth consecutive year the Port of Montreal set a record for cargo volume, and for the first time exceeded 40 million metric tons. The container sector also broke a new record with 1.75 million TEUs, up 5.4 per cent over last year, including an 11 per cent increase in the Midwest market. With strong results in dry bulk, liquid bulk and cruise ship traffic, the Port of Montreal can look back on a very positive 2019 as it continues to be an economic driver at the heart of an ecosystem of 6,300 businesses and in proximity to a pool of 110 million consumers. Steady growth in recent years has brought the Port of Montreal closer to its full capacity on land. To prepare for the future and support the growth of the container market, striving as always to boost efficiency and performance, the Port of Montreal is actively planning its next phase of development: a container terminal in the municipality of Contrecœur, located 40 kilometres from its current facilities. Now that this project is backed by the Canada Infrastructure Bank, its development will continue in 2020 heading for commissioning in 2024. The Port of Montreal remains committed to a long-term vision for regional and national economic vitality that benefits businesses, clients and consumers, which includes providing the utmost environmental protection. n
At the Port of Monroe “coal is king” and will always be the top commodity delivered to the Port as fuel for DTE Energy’s 3200 megawatt Monroe Powerplant. This cargo which totaled 1,034,924 metric tons in 2019 was complimented by 322,164 metric tons of limestone used in the plant’s flue gas desulfurization (FGD) process. The Port also handled nearly all biproducts produced at the facility shipping synthetic gypsum and bottom ash to locations in the U.S. and Canada. These inter-lake cargoes were bolstered by a record year for international Seaway cargoes which included import of salt, high value project cargo, and the export of wind tower sections manufactured at the Port. The 2020 shipping season is shaping up to be yet another record year for international cargo as the Port of Monroe has become a Midwest distribution hub for General Electric Wind and will welcome at least a dozen BigLift vessels carrying wind components destined for Michigan projects. 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 Eastern Seaboard. 35
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