Skillings Mining Review - Regular PIM

PROFILES IN MINING

Vanta E. Coda II

Executive Director, Duluth Seaway Port Authority

SMR: What are some of the differences and challenges you anticipate between managing logistics for a company or a line, as you have previously done, and managing a port itself?

VC: I’ll start with what remains the same. The common skill set needed to perform both jobs is what, I believe, was rightly targeted by the Port Authority Board in its search. That targeted set of skills was what identified me as a viable candidate.

What one practices as a transportation logistician is balance among many individual disciplines: operations, marketing and sales, shareholder relations, financial management and regulatory compliance.

Really, at the end of the day, a Port director deals with all of these fundamental disciplines. What’s changed for me is the setting – from the private to the public sector – and the number of stakeholders.

My largest challenge here is to learn all of the Port’s individual stakeholders. We are blessed at the Duluth Seaway Port Authority to have a dedicated, talented staff who have made this an easy, comfortable transition.

SMR: In 2010, 322.1 million metric tons of cargo was handled by all U.S. and Canadian ports and marine terminals on the Great Lakes-Seaway system. What initiatives or partnerships are place to increase cargo traffic?

VC: The Great LakesSeaway community is

vast, yet surprisingly small when it comes to decision-making. This community is dependent on a coordinated communications effort to ensure the waterway’s economic sustainability.

We view the Duluth Seaway Port Authority as holding an important leadership role within that community, particularly since the Port of Duluth-Superior is actually where the entire Great Lakes-Seaway system begins. Currently, we work with the American Great Lakes Ports Association, the St. Lawrence Seaway Development Corporation and others to promote this valuable trade route.

The real strength of the Great Lakes Basin and this 2,300-mile waterway has been its history of bi-national cooperation

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and mutual prosperity. I expect that the community will continue to find ways to collaborate – to establish new partnerships between stakeholders – linkages that offer more competitive routing to handle new tons.

SMR: Do you have any particular direction in mind yet for attracting new business to the port- do you know of some likely candidates for new occupants?

VC: Yes. Every shipper everywhere is a potential opportunity for the stakeholders within the Port Authority’s network of influence. In this part of the world we are blessed with natural resources that abound. Their use and, particularly the means by which those resources

are harvested, are being heavily scrutinized, and I believe that is a healthy process. It puts people in the position of re-evaluating how resources can and should be used. I believe that right now, cadres of very smart minds are working on solutions that create sustainable economic value for those resources.

We are working to make ourselves known to those who will put into place the manufacturing and processing facilities for the next generation.

Do I know what sector will be the most important over the next decade for the Port of Duluth-Superior and for the Great Lakes? No. I do know that in the stable are all of the important resource players working on what the next-level technology could be in the minerals, agriculture, and forest products industries. We have the pleasure of working with big corporations and small businesses. All have progressive activity and challenges. When those smart minds create that next generation breakthrough, we will help facilitate the pathway to the regional and global marketplace.

SMR: The expertise of Lake Superior Warehousing and the joint commitment to streamlining project cargo handling makes this terminal very attractive to major manufacturers and logistics experts worldwide who consider the Port of Duluth an ideal gateway in and out of the North American heartland. What are some www.skillings.net

of the best practices that you would be initiating to make this port even better in the future?

VC: I believe that the reputation stands on its own merits. With the best road and rail clearances to and from the interior of North America, the Port of Duluth – the Port Authority’s breakbulk terminal – has been able to specialize in fullservice dimensional and heavy lift cargo handling.

Anchoring the western tip of the Great LakesSeaway trade corridor, the Port of Duluth has emerged as a ‘cargo hub’ for the crucial industries that drive our regional economy including: mining, steelmaking, forest products, wind energy and oil/gas production.

Together, the Port Authority and Lake Superior Warehousing Co. (our terminal operator) remain committed to customer service, which may be one of the main reasons Duluth was voted top port in North America by the Railway Industrial Clearance Association just over a year ago.

When it comes to best practices, what’s most important is not to rest on our laurels. It’s what we do today and everyday that counts. We need to focus on the details of every lift at the Port and make continuous improvements.

Lake Superior Warehousing has been an excellent partner, and I believe that the leadership within that organization is properly focused on operational excellence. Expanding our multimodal facilities will help ensure that when we say ‘Duluth Delivers,’ we have the facilities and expertise to do just that for a whole new generation. www.skillings.net

SMR: How does the port’s coal and iron ore traffic compare to other traffic the port sees? Do you expect mining business to grow?

VC: The mining traffic is and has been one of the life bloods of this Port community for over 100 years. It is our past and our future. Mining and commodities are a cyclical business. Shipping traffic will continue to follow those trends. I believe the world’s economic factors are pointing to a more stable environment, which should bode well for those commodities here in North America and particularly in terms of their export potential.

SMR: Most Great Lakes ports require regular dredging to remove sand and silt that naturally accumulate in shipping channels. We understand that this work is carried out by the Army Corps of Engineers but due to inadequate budgetary resources, the Corps has been unable to properly dredge most Great Lakes harbors. The FY2014 budget only provides $38.6 million to dredge Great Lakes navigation channels - a shortfall of $41.2 million compared to the amount needed. What are your ideas on closing the remaining budget gap?

VC: Personally, I don’t have the answers to that question. Some very smart individuals in D.C. have been attempting to tackle this and many other issues related to budget shortfalls.

What I do know is that our maritime transportation community not only pays a huge amount of taxes and user fees but also provides hundreds of thousands of very good-paying jobs.

I view the maintenance of marine transportation

infrastructure as a primary responsibility of our federal government. Those with influence over budget allocations need to fund what they are obligated to fund … to follow-through on commitments already made. In terms of dredging, were they to view the Great lakes as a single system in allocating funds…and commit to spending what is taken in each year in the Harbor Maintenance Trust Fund for its intended purpose, the harbors and shipping channels across the Great Lakes would be well maintained, and vessels could resume moving cargo at full capacity throughout the system.

SMR: With a $10 million TIGER grant from the U.S. Department of Transportation, the Duluth Seaway Port Authority embarked on an exciting new project along Duluth’s waterfront. What are the plans and current project status?

VC: This intermodal project will build a foundation – will set the table – for the Port’s next 50 years of growth. The redevelopment of Garfield Pier/Docks C&D will not only re-establish the pier’s structural integrity but also connect its 28 acres to existing road and rail infrastructure. The project will resurrect a dying dock and put it back into service.

Once complete, the new platform will markedly expand the Port’s general cargo handling capacity and afford a much needed platform to encourage new industrial development.

This redevelopment project represents a major undertaking for the Duluth Port. The total price tag is $16 million. In addition

to the $10 million TIGER grant, costs will be covered by nearly $3 million from the Minnesota Port Development Assistance Program, with the balance committed by the Port Authority itself.

Preliminary engineering design work to stabilize and upgrade the site has been completed, and we’ll be moving through the permitting process and construction timetable in accordance with grant guidelines.

SMR: A study titled The Environmental and Social Impacts of Marine Transport in the Great Lakes-St. Lawrence Seaway Region found that Great Lakes ships are more fuelefficient and emit fewer greenhouse gases per thousand cargo-ton miles than land-based alternatives.

What is your assessment on this report and also a comparison of the Great Lakes with other ports?

VC: From a practitioner’s standpoint, marine has always been the first economic mode of choice in the logistics arsenal – particularly when it comes to moving cargo long distances. The study to which you are referring demonstrates just how much more fuel-efficient and environmentally friendly Great Lakes vessels are in terms of greenhouse gas emissions than landbased alternatives. That study also showed that with new technologies and lower sulfur fuels coming onboard between now and 2025 plus regulatory changes being implemented, the benefits of marine shipping will continue to increase dramatically in the decade ahead.

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