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CHARTING A COURSE ON THE

SEAS OF THE WORLD Grise Fiord Resolute Bay Cambridge Bay

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Maputo Namibe

Durban

Buenos Aires

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21, Marché-Champlain Street Québec, QC G1K 8Z8

Telephone: (418) 692-1000 Fax: (418) 692-6044 E-Mail: [email protected]

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Contents M A G A Z I N E

Publisher

Chamber of Marine Commerce Editor

Leo Ryan Marketing and Business Development Director

Sophie Belina Brzozowska Electronic publishing

SPIN Visual Communications www.spinvisual.com

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Editorial office

350 Sparks, Suite 700 Ottawa, Ontario Canada K1R 7S8 Tel. 613-238-8779

2014 Special Publication

Printed in Canada.

Cover Photo: Algoma Central Corporation’s new vessel Algoma Equinox unloads iron ore at ArcelorMittal Dofasco in Hamilton. Photographer: Roy Timm

Great Lakes-Seaway shipping helps build new World Trade Center

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The Panama connection Regulatory Horizons

Shortsea Shipping

From the Publisher Marine just keeps on delivering Message from the Prime Minister Message from the Minister of Transport News Marine’s #1: New study reveals safety record in the Great Lakes



Political waves: From the helm of the marine industry caucus

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Here come the ships … In Conversation An exclusive interview with Fednav

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Betty Sutton: the U.S. Seaway’s new administrator

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New investment & initiatives cut cross- border costs & hassles

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Copyright 2014 Chamber of Marine Commerce The content of Marine Delivers Magazine may not be reproduced without prior written consent.

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Trade Winds Waterway generates substantial cross border trade

More ballast water regulations?





Stakeholder Views In their own words … North American industry on why it uses Great Lakes shipping Mayors of port communities see growth opportunities amidst infrastructure challenges

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Year Ahead A look through the spyglass …

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Advertisers’ index

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From the Publisher

Marine just keeps on delivering Stephen J. Brooks President, Chamber of Marine Commerce

now we’re delivering. That’s how we roll, … er, float. What’s more is that these vessels are not only new, they’re more efficient, even more environmentally-friendly, safer and technologically-advanced. For our industry and for society as a whole, that means marine delivers even more than ever before.

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t’s an exciting time for our industry. New ships, new cargoes, new customers, new studies shedding light on new issues, new opportunities, new prosperity. In the wake of our campaign – and the federal government’s landmark decision – to remove the duty on imported foreign-built vessels, Canadian shipping has responded by investing over $1 billion in brand new ships for the Great Lakes – St. Lawrence region. And the new ships are arriving. On page 15, you’ll enjoy seeing some of the remarkable new vessels that have already arrived to our shores. You’ll also learn about so many more new ships that are on their way. Yes, we asked for relief from a punitive, restrictive, protectionist government policy on new ships. The government responded. And 7

A couple of years ago, we released a long-overdue study quantifying the incredible economic impact of the bi-national Great Lakes – St. Lawrence Seaway. Amongst other vital stats, it concluded that our industry generates $34 billion a year in business revenue, is responsible for 227,000 jobs and contributes $4.7 billion per year in taxes. These were impressive results for which our industry should be proud. It will certainly be interesting to see how this data may have changed as we look forward to updating our study this year. In 2013, we focused on trying to better understand industry’s social impacts and released the report, Environmental and Social Impacts of Marine Transport in the Great Lakes-St. Lawrence Seaway Region. Again, the results proved what many in our industry have known all along. Shipping is handsdown the most fuel-efficient way to move freight. The combined Canadian and U.S. Great Lakes-Seaway fleet can move its cargo 14 per cent farther than rail and 594 per cent farther than trucks. The study also showed that the marine advantage over other modes will only increase with the displacement of older vessels by the new ships now entering the system. So what’s left to prove? We’re now busy uncovering new data on other

important industry metrics. The Chamber of Marine Commerce’s Ray Johnston is just finishing up work on a study that demonstrates marine’s incredible safety record, which you can read about on page 12. We’ve also begun work on a report that seeks to better understand overall industry capital investments. We look forward to releasing the results of these studies to you soon. On the regulatory front, we continue to be challenged with difficult rules on ballast water and air emissions standards. And government continues to seek to recover additional funds from industry to pay for icebreaking and navigation aids. But like most regulatory matters, progress is often measured in micrometers. Indeed, it took many years for the government to see the wisdom of duty removal. It has also taken years for New York and other Great Lakes states and U.S. authorities to ratchet down what were once absolutely impossible ballast water proposals. Governments have also moved over the past couple of years to some degree of reason on air emissions regulations. Indeed, the microscopic movement is small, but over time it all adds up to important awareness, understanding and, ultimately, progress. When the Chamber of Marine Commerce spearheaded the Marine Delivers communications program with industry partners about six years ago, we knew our industry was already delivering not only valuable cargo but even more valuable social and economic opportunities. With more ships and other new initiatives coming over the next year, it’s clear that marine is an industry that just keeps on delivering. n 7

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message from the Prime Minister

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am delighted to open the 2014 edition of Marine Delivers Magazine with some thoughts on the evolving nature of the marine transportation industry.

Canada has a rich history as a maritime nation. More importantly, we also have a bright future as a leader in the provision of safe, secure, efficient and environmentally responsible marine transport. I know that this aspiration is shared by the Chamber of Marine Commerce - and the Government of Canada deeply values our ongoing partnership. Representing some 170 diverse industry players, your organization plays a crucial role in building long-term prosperity by creating jobs and promoting growth. Marine transport has allowed Canada to connect with widely-dispersed communities, access our wealth of natural resources and move people and goods. Further, maritime shipping plays an essential role in fuelling our participation in the worldwide economy. The maritime industry has helped to shepherd Canada’s economic recovery by opening gateways to international trade. Our Government is committed to ensuring that our major facilities and networks move goods quickly and efficiently. Since 2006, we have invested more than $3 billion in upwards of 98 diverse projects through our two gateway funds: The Asia-Pacific Gateway and Corridor Initiative and the Gateways and Border Crossings Fund. Yet, as we work to build prosperity and increase trade, we must also strive to protect Canada’s environment. According to the study The Environmental and Social Impacts of Marine Transportation, shipping has the lowest environmental impact and the highest level of energy efficiency of all forms of commercial transportation. In a bid to further this proud legacy, one of our first priorities in the Fall Session of Parliament was to re-introduce The Safeguarding Canada’s Seas and Skies Act. It includes important initiatives that will curb pollution, streamline penalties, empower responders to act in emergency scenarios and strengthen the authority of Transport Canada inspectors. I know my colleague, the Hon. Lisa Raitt, Minister of Transport, deeply values the partnership her office enjoys with the Chamber of Marine Commerce. As we look toward capitalizing on our momentum going forward, Minister Raitt will rely on your expertise and experience. Sincerely,

The Rt. Hon. Stephen Harper, P.C., M.P. Prime Minister of Canada 9

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message from the Minister of Transport

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would like to take this opportunity to congratulate the Chamber of Marine Commerce on its contributions to this country.

By linking together the many players in our marine industry, your organization connects Canada’s heritage as a maritime nation with our commitment to building prosperity through international trade. Marine transportation is essential to this commitment. The Great Lakes-St. Lawrence Seaway, for example, is one of the world’s biggest trade corridors, connecting to a transportation network that moves goods to and from communities across our country and continent. It’s a route through which billions of dollars in trade flows safely every year, and which supports more than 200,000 jobs in Canada and the United States, making it a major asset to both of our nations. The Government of Canada is working with our partners in the United States, as well as groups such as the International Joint Commission, to address several factors concerning the Great Lakes-St. Lawrence Seaway system, including environmental protection, regulation of water levels and navigation. As well, we are adopting new standards to reduce air emissions from ships in Canadian waters, and aligning these standards with those of the United States. The marine industry is fundamental to international trade, and I am particularly proud that our government has successfully concluded negotiations on the Canada-EU Comprehensive Economic and Trade Agreement. This historic agreement will create thousands of jobs for Canadians and give Canadian businesses access to a half-billion new customers. It will open new markets throughout Europe for Canadian exporters, and generate significant benefits, jobs and opportunities for all Canadians. The benefits of this agreement are equivalent to creating almost 80,000 new jobs. Maritime trade has played a prominent part in Canada’s history. I believe that, by working with groups such as yours, we will continue to strengthen our marine transportation industry – creating growth, jobs and prosperity for this country for years to come.

The Honourable Lisa Raitt, P.C., M.P. Minister of Transport

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News

MARINE’S #1: NEW STUDY REVEALS SAFETY RECORD IN THE GREAT LAKES

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ew analysis of government records in Canada and the U.S. shows ships that transport goods in the Great Lakes-Seaway region have an excellent safety record in terms of both public and workplace safety. According to a report prepared by Ontario-based transportation consultants Research and Traffic Group (RTG), 100 per cent of all vessel trips in the Great Lakes-Seaway region between 2002 and 2011 were fatality-free and 99.997 per cent were injury-free from shipping accidents. Drilling down into the data, the report shows that Great Lakes-Seaway ships operating in Canada and the U.S. carried more than 1.5 billion metric tonnes of cargo over the 10-year period without any accidents negatively impacting public safety.

He explains: “There are numerous safeguards in place in the Great LakesSeaway System. Vessels involved in domestic and cross-border trade comply with about 30 sets of Canadian and U.S. regulations. The navigation system has world-leading traffic control systems, safety training of crews as well as comprehensive emergency response systems.” RTG analysis shows that the rate of collision-related injuries per 100-billion tonne-km for marine transportation in this region is 17 times lower than the national rate for Canadian freight

railways and 70 times lower than U.S. class 1 freight railways. Collision-related casualties were defined as those resulting from a vessel accident and are compared to casualties due to train derailments/ collisions, highway grade crossing collisions and trespass collisions. One of the many elements of the safety regime is pilotage. “Pilots have knowledge of local geography, weather, currents and other sailing conditions that are beneficial

Between 2002-2011, vessel collisions resulted in zero fatalities and injuries to members of the public, and two injuries to marine transport employees. “One of the greatest benefits of marine transport is that ships are able to deliver the raw materials and products that cities, farmers and factories depend on with very little negative impact on public safety,” says Ray Johnston, executive vice-president of the Chamber of Marine Commerce, one of the organizations that commissioned the report.

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Source: RTG analysis of activity and casualty data compiled by Canadian Transportation Safety Board, U.S. Coast Guard, Federal Railroad Administration, Bureau of Transportation Statistics, Railway Association of Canada. Note: The collision-related injuries and fatalities are those casualties resulting from a vessel accident and would be comparable with fatality rates from crashes or derailments in truck and railway modes. Railway crash data include fatalities from three sources: train derailments/collisions, highway grade crossing collisions and trespass collisions. Unlike the Canadian railway data, employee casualties in the U.S. include workplace accidents related to track maintenance.

News to captains that may not frequent particular regions. The pilot’s specific training and experience supplements the captain’s expertise to help ensure the highest standards of safety are being achieved,” says Captain Simon Pelletier, president of the Canadian Marine Pilots’ Association. Lowest Workplace Incidents

Source: Fatality rates based on census data published by the U.S. Department of Labor, Bureau of Labor Statistics, Census of Fatal Occupational Injuries (2002-2011) Note: Marine casualties are those of the combined U.S. and Canadian waters of the Great Lakes-Seaway based on USCG and TSB data. (To be consistent with the U.S. Department of Labor data, deaths due to pre-existing medical conditions are excluded)

The Research and Traffic Group study also shows that Great Lakes-Seaway mariners have significantly lower employee injury and fatality rates than other U.S. transportation and material moving occupations, including rail, trucking and aircraft carrier sectors. Employee injury rates for U.S. rail transportation over the 10-year period 2002-2011 were about 19 times higher and long-distance trucks about 47 times higher. Employee fatality rates for rail transportation were about 50 per cent higher and long-distance trucks 5.5 times higher.

Source: Injury rates based on census data published by the U.S. Department of Labor, Bureau of Labor Statistics, Census of Fatal Occupational Injuries (2002-2011) Note: Marine casualties are those of the combined U.S. and Canadian waters of the Great Lakes-Seaway based on USCG and TSB data. (To be consistent with the U.S. Department of Labor data, deaths due to pre-existing medical conditions are excluded)

100 per cent of all vessel trips in the Great Lakes-Seaway region between 2002 and 2011 were fatality-free and 99.997 per cent were injury-free from shipping accidents. SHIPS CARRIED MORE THAN 1.5 BILLION METRIC TONNES WITHOUT ANY ACCIDENTS NEGATIVELY IMPACTING MEMBERS OF THE PUBLIC.

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Did you know

it takes a minimum of 8 years to qualify as a Master of a Great Lakes vessel in Canada? Formal education often begins as a navigation cadet at one of four Canadian marine training schools, which are recognized by Transport Canada. The schools provide formal marine training and initial Certificates of Competency through a three- to four-year degree program. Additional sea time and service in junior and more senior ranks of 3rd, 2nd and 1st Navigation Officer on specified ship sizes and geographic waters and additional examinations must then be completed. The final step is passing Transport Canada, Marine Safety’s examinations. But that doesn’t mean a certified Master will automatically get command of a ship. Ship operators evaluate the experience and training of a candidate before appointing a person Master (Captain). And once hired, a Master in Training often undergoes another six to 12 months of onboard company-led training.

Johnston adds: “Public and employee safety is the industry’s top priority. The risk of human error means that every industry will have accidents. But how an industry responds to these incidents and works to prevent them in the future is a true testament to its commitment to protect people, property and the environment. In this region, emergency preparedness scenarios are always being tested and finetuned and shipowners are incorporating new safety features on vessels as well as continuously improving safety training for staff — all with the goal to do better.”

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Donald Roussel, director general of Marine Safety and Security for Transport Canada, says:“Marine industry stakeholders, the St. Lawrence Seaway Management Corporation and federal government agencies have worked together over many years to put in place a world-class regime for the Great Lakes- St. Lawrence Seaway region that puts the Canadian public and workplace safety at the forefront.” The study’s marine data was based on records provided by the U.S. Coast Guard and the Canadian Transportation Safety Board and included Canadian,

U.S. and international vessels operating in the Great Lakes, its tributaries and the St. Lawrence Seaway. Any incidents in the lower St. Lawrence River were only included if the vessel had an origin or destination west of Montreal. The report, entitled the Safety Profile of the Great Lakes-St. Lawrence Seaway, will be available in February at www.marinedelivers.com and www.cmc-ccm.com. n

Here Come the Ships …

News

Factories, farmers and miners benefit from largest Great Lakes fleet renewal in 30 years By Julie Gedeon

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fter the St. Lawrence Seaway reopens this spring, Western Canada’s largest wheat harvest on record will continue to make its way to overseas markets until June or July. Some of it might very well be shipped aboard one of the CWB’s two brand-new Equinox Class gearless bulk carriers.

but also a much greater understanding of the logistics and costs involved with shipping,” White says. “Given the bright future we see for Canadian grain and our recognition of the need for Great Lakes fleet renewal, we regarded these purchases as a great opportunity to be part of this new era in shipping.”

“We’re expecting the vessels in the first half of this year so, yes, it’s very possible they will transport some of this bumper crop,” says Ian White, CEO of CWB (the former Canadian Wheat Board). The vessels will be managed and operated by Algoma Central Corporation on behalf of the CWB, transporting wheat destined for export and other commodities demanded by manufacturers in the Great Lakes-St. Lawrence Seaway region.

and environmentally, this renewal is certainly good news for Canadians.”

The vessels are part of a more than $1 billion investment by Canadian and international shipowners into the renewal of the Great Lakes fleets. “We regard these vessels as a good investment that provide us with some leverage in terms of grain movement,

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“Economically

There are eight Equinox Class vessels in total, six of which are owned by Algoma Central. The ships are designed to carry more cargo at higher speeds, using significantly less fuel. “Our costs per tonne for moving grain should definitely be lower, and we may in some cases be able to make fewer trips overall,” White says. “The slightly bigger cargo hold should also make it easier to load and unload grain.”

Greater fuel efficiency, coupled with the first exhaust-scrubbing system on the Great Lakes, will reduce the Equinox’s greenhouse gases by 45 per cent per tonne/kilometre of transport and eliminate sulphur oxide emissions by 97 per cent. Particulate matter from the main and auxiliary engines will be reduced by 75 per cent. “What’s great about these vessels is that they go well beyond current environmental standards to meet future expectations,” White says. Midwest Energy Resources Company (MERC), which operates a large terminal for Western coal at Superior, WI, was delighted to have one of its shipments aboard the maiden voyage of CSL Group’s Whitefish Bay last May, according to MERC’s president Fred Shusterich. “In our trade, we’re particularly excited about the arrival of these new ships because these high-calibre, state-ofthe-art vessels equate to increased efficiency and lower costs for our customers – all of which bodes well for continued exports,” he says.

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News The coal was carried during the first leg of the Whitefish Bay’s maiden voyage along the so-called ‘Northern Corridor’ to Europe. The Whitefish Bay is the second of four new Trillium Class self-unloading vessels now operating primarily within the Great Lakes-Seaway region. They are part of a major fleet renewal at CSL that includes two other Trillium class bulk carriers and three Panamax vessels. Improved design and technology makes the Trillium class vessels 15 per cent more fuel-efficient than CSL’s previous lakers. State-of-theart cargo handling equipment will minimize dust and cargo residue.

“In our trade, we’re particularly excited

about the arrival of these new ships because these high-calibre, state-of-the-art vessels equate to increased efficiency and lower costs for our customers – all of which bodes well for continued exports.

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Faster de-ballasting system “The big advantage for us is the much faster de-ballasting system,” Shusterich says. “For us, time is money, so it’s great that we’ll now be able to load 6,000 to 7,000 tonnes of coal per hour and have the vessel keep up with the necessary de-ballasting at the same pace. “I really applaud CSL, Algoma, Fednav and the other companies involved in fleet renewal for really looking at the drawbacks of the older vessels and coming up with solutions that are more efficient, cost-effective and environmentally friendly,” he adds. “They’re moving the shipping industry into the next century.” While St Marys Cement Group won’t likely be using any of the new-builds, the company with eight terminals in the Great Lakes region welcomes how the new vessels will boost the availability of other ships, which are used to bring raw materials to its facilities and move products to its customers. “Having access to marine transport on the Great Lakes is essential to our operations,” says Bill Asselstine, St Marys Cement’s vicepresident of logistics. “The fact that shipowners are investing heavily in fleet renewal gives companies like ours confidence the inland navigational system will be maintained and has a strong future.” The more than $1 billion being invested by Canadian and international shipping companies in fleet renewal in the region will significantly improve the industry’s sustainability. “Protecting the Great LakesSeaway is a top priority for Canadians and fleet renewal of the vessels that travel these waters will lead to better protection of this region,” says Larry Miller, the Member of Parliament chairing the House of Commons Transport Committee. “Economically and environmentally, this renewal is certainly good news for Canadians.” 16

News At the end of 2013, Sterling Fuels introduced a new state-of-the-art product tanker MT Sterling Energy to serve customers in the Port of Hamilton and on Lake Ontario. Built in Turkey in 2002, Sterling invested $800,000 to upgrade mechanical and safety equipment to meet Canadian standards. The new vessel is double-hulled to prevent spills in case of an incident and has a pollution boat with 400ft of containment booms for rapid deployment. A close circuit video surveillance system was added for security and to have all fuellings recorded. Canada Steamship Lines now has four new Trillium Class, self-unloading bulk carriers operating in the Great Lakes-Seaway System. Two more gearless bulkers are expected in 2014. The latest engine technology and vessel design mean these Trillium Class vessels can travel 481 kilometres per tonne cargo on a single litre of fuel, making it more than twice as efficient as rail and six times more efficient than trucks. Carbon emissions are 15 per cent lower than its previous class of ships, cutting 2400 tonnes per ship annually. Algoma Central Corporation’s first new gearless bulker, Algoma Equinox, arrived for service at the end of 2013, with another seven gearless and self-unloading vessels expected in 2014 and 2015. Equinox Class ships will carry more cargo, at higher speeds using less fuel; resulting in a 45 per cent reduction in greenhouse gases per tonne-kilometre carried. These vessels will also have the first exhaust gas scrubbing systems to operate in the Great Lakes and St. Lawrence Seaway, eliminating 97 per cent of sulfur oxide and 75 per cent of particulate matter emissions from the main and auxillary engines. In 2013, Fednav Limited ordered six new ocean-going vessels to bring cargo in and out of the Great Lakes-Seaway to and from international markets. The 34,000-ton bulk carriers will be built with “box” holds, better suited to a variety of general cargo like steel and project cargo. They will consume 28 per cent less fuel and produce 28 per cent less emissions than vessels built by Oshima Shipyard for Fednav ten years ago. The engines will also reduce nitrogen oxide emissions by approximately 33 per cent. The six additional vessels will be delivered between May and November 2015, as part of a series of 27 new ships (of which 14 are Lakers). McKeil Marine Limited added a new barge to its fleet that is specifically designed to access shallower docks as a way to circumvent lower water level trends in the Great Lakes. The Huron Spirit will be used to carry mainly construction-related bulk materials and heavier break bulk such as steel coils throughout the Upper Great Lakes. The shallow draft barge is also designed with a strengthened deck to allow the vessel to carry considerably more or heavier cargo at its normal 19 feet draft. The vessel is fitted with a 150-foot self-unloading boom, which allows transfer of cargo such as stone to shore terminals without the need for dock operators or cranes. Desgagnés has invested more than $250 million on new vessels during the last five years, including the Tweendeck heavy lift multi-purpose cargo vessel Claude A. Desgagnés purchased in 2012. This ship produces 10 per cent less GHG emissions and 35 per cent less NOx emissions than the company’s previous generation of vessel. The company is now in discussions with shipyards to continue its fleet renewal programme.

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Photo credit: Marie-Claude Hamel

AN EXCLUSIVE INTERVIEW IN CONVERSATION WITH Fednav LEO RYAN

Laurence (Ladi) Pathy, chairman, Mark Pathy, co-CEO, and Paul Pathy, co-CEO, on the look ahead for Montreal-based Fednav Group. Among its primary activities, Fednav is the largest carrier in international Great Lakes shipping as well as provider of bulk and breakbulk transport worldwide (including the Arctic) and of stevedoring services in Canada and the United States.

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In Conversation

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irst of all, one should single out a rather remarkable phenomenon: apart from specialists in the marine industry, few people realize that the fledgling enterprise that became the leader in Great Lakes international shipping is owned and managed today by members of the same family that created it 70 years ago in September 1944. Ladi Pathy. It is true that there are not many family shipping companies in North America. In Europe, however, shipping remains a very family-oriented business.

Q Mark and Paul, what eventually led you to join your father in the company? Mark Pathy. We were never pushed to join the family business. Both of us had prior careers in other industries and only joined the company in our late 20s. Personally, I have found it to be a very dynamic and stimulating industry, dependent on an ever-changing set of variables in the global economy. Now, I can’t imagine doing anything else. Paul Pathy. The shipping of commodities is a backbone of the world economy. Whatever events make newspaper headlines, from growth in China to drastic weather incidents and conflicts in the Middle East, they directly affect this business. I really like to be involved in a business you can touch and taste.

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Indeed, Fednav is known for a family culture that is sometimes not as obvious in publicly traded companies. Ladi Pathy. The culture of the company can be summed up as one of total integrity, sound business judgment, and very close interest in the people who work here. It’s almost like having a larger family that we, as owners and managers, feel responsible for. We have many longtime employees who have clearly lived their whole business lives with us. 19

Mark Pathy. A strong sense of loyalty from our employees is reflected in our retention rates. In addition, since Montreal is not one of the world’s great shipping centres like London or Singapore, there is a limited available pool of shipping expertise. So, in general, we have to rely on a strategy of hiring bright young men and women and training them to be excellent shipping people. So once you have made that investment, you obviously want to keep them.

Q In recent years, we have seen Fednav

invest hundreds of millions of dollars in new vessels to renew its fleet. What is all the more striking is that Fednav has never wavered during this period from its confidence in the future of the Great Lakes/St. Lawrence waterway as a gateway to the industrial heartland of North America despite a decline in Seaway traffic. Mark Pathy. There’s no doubt that Seaway volumes aren’t what they used to be, but they have stabilized in recent years. The Seaway will remain a critical gateway for trade with Europe, the Americas and Africa. In addition, we’re witnessing a growing need for project cargo associated with the development of energy resources in North America, including the Alberta oil sands and wind farms. There’s also a resurgence in manufacturing fuelled in part by the discovery of these energy resources. These are all positive indicators for general cargo imports. At the same time, growing demand in the developing world for coal and in Europe for biomass are creating new export opportunities.

Q Fednav is unquestionably the largest

ocean-going user of the Seaway. Amidst rising competition, does Fednav still, as it did a number of years ago, account for one out of every two deepsea vessels transiting the Seaway’s system of locks and channels? Mark Pathy. We are today at about 40 per cent on a volume basis. Heavylift project cargo and specialty cargoes like windmills, coming in on smaller

(foreign-flag) vessels, have been a factor in reducing our overall share.

Q A decade ago, cargo volumes

through the Great Lakes were reported to represent 50 per cent of Fednav’s total tonnage compared with up to 75 per cent previously. What has been the geographic evolution of this trade? Mark Pathy. Great Lakes trade is now about 30 per cent of our business. The drop is a reflection of reduced cargo volumes but also of our expansion into more wide-ranging trading patterns in the Atlantic as well as growth in the Pacific.

Q For many years, Fednav has operated

a scheduled service, FALLine, between North European, St. Lawrence and Great Lakes ports. Concentrated on steel-in and grain-out, how is this traffic developing under current conditions? Mark Pathy. Volumes took a huge dip in 2009 during the worst of the global economic downturn but have been steadily recovering since then. In fact, in 2013 we will have recorded more tonnage and sailings than we’ve had since 2006. Of course, profitability varies year to year, but the cargo volumes seem to be coming back.

Q Looking to its future, FALLine appears

to be well positioned to expand its business under the Canada-European Union free trade agreement concluded on October 18, 2013. How do you see the opportunities? Mark Pathy. We would expect the agreement to improve the economics of both traditional FALLine cargoes inbound, namely steels and general cargo, as well as agri exports outbound, which in combination could be quite positive for the Seaway. In our business, it may not actually create new trade but will facilitate existing trade between Canada and Europe, resulting in an increase of the volumes we carry. That being said, the deal has to go through a lengthy ratification process that could last two years. 19

In Conversation

Q Let’s look at perspectives for Federal

Marine Terminals, which operates stevedoring facilities in 11 ports in the U.S. East Coast, the Gulf Coast and the Great Lakes.

Paul Pathy. In general, these terminals became an added part of the services that Fednav offers. The terminals on the Great Lakes are not doing as well as they once did, but we are diversified enough so we can spread things out. For example, Florida has been booming with construction materials that helped to offset slower activity elsewhere. Hamilton had a fantastic year a couple of years ago. And the Gulf terminals are presently showing great strength.

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Founded in 1944, with its head office in Montreal, privately owned Fednav Limited is Canada’s largest dry-bulk shipowning and chartering group and biggest ocean-going user of the Great Lakes/St. Lawrence Seaway System.

z More than 20 million tonnes of bulk and breakbulk cargoes are transported on global maritime trade routes. z

Operates a fleet of 75 owned and chartered vessels. Currently 16 new buildings on order under a major fleet renewal program.

z

Fednav directly employs 260 office staff, including 140 in its Montreal headquarters, about 1,200 personnel onboard under contract on its owned vessels, and over 500 stevedores in the company’s terminals.

z

For many years, Fednav has operated a scheduled service known as FALLine between Northern Europe, Montreal and Great Lakes ports.

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In addition to marine transportation, the Group provides ice navigation services, stevedoring at 11 ports in the Great Lakes, the U.S. East Coast and the Gulf Coast, and such logistics services as warehousing and ground transportation.

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Mark Pathy. Ships are movable assets. They can go where business leads them. But terminals are fixed assets. Thus, diversification is a major strategic component.

Q Moving on to Fednav’s very substantial

fleet renewal program, please outline some of the highlights and the impact on your operations globally and regionally? MARK Pathy. There were 10 newbuilding deliveries in 2012. And we have now 16 vessels on order for delivery mainly in 2015-2016. What’s significant, too, about this major renewal is that it shifts the balance of our fleet (some 75 ships) from charter-dominant to an owned-based fleet. This certainly reflects our commitment to the industry and to the Lakes in particular because 12 of the 16 new vessels will be Lake-suitable Handysize bulkers. They will use 28 per cent less fuel (emitting 28 per cent less GHG emissions) and produce 33 per cent less nitrogen oxide emissions than the earlier generation of ships purchased a decade ago from the Oshima Shipyard. The general design improvements by the Japanese shipyard and by our own naval architects also allow us to build ships that are flexible enough to adapt to the changing global environment. So when the Seaway is closed (in the winter months), these very efficient ships can compete with any of their size anywhere in the world. Ladi Pathy. It’s important to note that we don’t cut corners. These ships are probably not built as cheaply as they could be if we were short-term players. We are building them to maximum safety and design standards and we are building them to last. We are not looking at ships that we could flip or sell to somebody else in five or ten years. Our approach helps us with shipper/customers who, more and more, are demanding not just good freight services but superior environmental and safety performance. Another key point I would like to make is that we are in a very fortunate position as a company because we chose not to order new vessels when the shipbuilding market was at its peak. We waited for the opportune time for newbuild prices to decline to rebuild our fleet.

Q What are the elements in the present

volatile environment of international shipping that concern you the most – such matters as escalating fuel prices, vessel oversupply, slim profit returns from historically weak freight rates, increasing finance and operating costs, complex regulatory issues, uncertain economic trends or a combination of the above? Mark Pathy. A lot of those issues are related, but the fundamental factor that concerns me is the oversupply of vessels. In addition to companies like ours that are renewing their fleets, we’ve seen a trend lately of non-shipping interests jumping into the market – investment funds ordering dozens of ships at a time. I think this development, taking place while the industry is still reeling from the last surge in newbuild orders and the crash in the global economy, is likely to push any kind of sustained recovery even further out.

Q In your view, which shipping firms

stand the best chance of surviving in this environment? Mark Pathy. I think the survivors will be well-managed companies that take a conservative and measured approach and avoid making rash decisions based on short-term market volatility.

Q Last, but not least, we should at

least briefly review Fednav’s historic pioneering role in Arctic shipping, especially with several new initiatives on the immediate horizon. Paul Pathy. We have been moving cargo in and out of the Canadian Arctic for over 50 years, initially in resupplying Northern communities and serving DEW line stations and during the last 25 years in transporting all the bulk ore and concentrates that have moved out of High Arctic mines. At the present, we own and operate the world’s largest and most powerful non-nuclear ice-breaking bulk carriers, the Umiak I and the MV Arctic. These vessels carry base metal concentrates on long-term contracts from Raglan (Quebec) and Voisey’s Bay (Labrador), to the Port of Quebec, returning with

In Conversation

“ we’re witnessing a growing need for project

cargo associated with the development of

energy resources in North America, including

”

the Alberta oil sands and wind farms.

re-supply materials loaded in St. Lawrence River ports. 2014 will mark a new chapter in Fednav’s Arctic operations stemming from an agreement signed a year ago with Canadian Royalties for transporting nickel and copper concentrates from Nunavik in northern Québec to customers in Europe as well as imported mine supplies from Europe. For this purpose, a dedicated 25,000 DWT Polar Class 4 bulk carrier, the MV Nunavik under construction at a Japanese shipyard, should be making its first winter voyage during the first quarter of 2014. Of great significance, too, will be the critical role Fednav will be playing in the shipment of iron ore from Milne

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Inlet on Baffin Island to Europe from the vast Mary River orebody. Overall, we believe that the experience we have gained and the expertise we have developed in Arctic transportation over the last half century will stand us in good stead as we continue to develop opportunities in the Arctic.

Q Otherwise, how do you respond

to mounting reports or speculation that warming temperatures will open up the whole Northwest Passage in the relatively near future to commercial shipping for an extended summer navigation season? Is such a full transit concept realistically viable compared with the more restricted

“destination” approach that has long been a Fednav strategy? Paul Pathy. We don’t believe the Northwest Passage will become a viable, regularly traveled trade route, despite the apparent shift in climate. The ice conditions remain challenging even in the warmer months, openwater navigation and draft is limited, and there is little icebreaking or infrastructure support available in the event of an emergency. It might make sense for the occasional cargo under ideal circumstances, but as a general rule, the Northwest Passage is unlikely to become a practical or meaningful transportation artery in the foreseeable future. n

In Conversation

Betty Sutton

Administrator, U.S. Saint Lawrence Seaway Development Corporation

I

was honored when President Obama appointed me to take the helm of the Saint Lawrence Seaway Development Corporation (SLSDC). Transportation Secretary Anthony Foxx administered the oath of office to me last August and I am proud to be part of the team at the U.S. Department of Transportation. As a native of the Great Lakes region, I grew up with an appreciation for the water and the significance of the Great Lakes to commerce and to people’s daily lives. I know first-hand the importance of the Great Lakes St. Lawrence Seaway System to our national transportation system and to the economic vitality of the United States and Canada. It is a model of international partnership and proves that two countries can work harmoniously to operate and maintain a complex international waterway in a safe and seamless manner. I believe in public service, and the SLSDC Administrator position offers a unique opportunity to make a real and long-lasting difference in the lives of the many individuals who depend on the Great Lakes St. Lawrence Seaway System. To that end, it will be a priority for me to increase the utilization of the Seaway to spur economic development and broaden the general understanding of the economic importance of the System. Most people just don’t realize the impact that marine shipping has on their daily lives. As the delivery network for commodities, the marine industry is vital to our economic and environmental well-being. It affects everything from the automobiles we drive, the office buildings we work in, the energy that heats our homes, and the food we put on the dinner table. Yet we must not lose sight of the importance of balancing economic and environmental objectives: we must not only strive to increase the economic output and number of jobs created in the region, but also strive to improve the environmental quality of the region. 22

These goals are not mutually exclusive. In fact, the Seaway is working to promote the environment and the economy. While we have a mission to keep the Seaway operating safely and efficiently, we also have an obligation to do so in an environmentally sound way. Marine transportation is good for business and it is good for the environment. A maximum Seaway-size Laker can carry 30,000 metric tonnes per voyage, which is the equivalent of 301 rail cars or 963 semi-trailer trucks. On average, vessels are 7 times more fuel-efficient than trucks and 1.14 times more fuel-efficient than trains. Ships also have the smallest carbon footprint compared to trucks and trains. Rail and trucks would emit 19 per cent and 533 per cent more greenhouse gas emissions respectively if the three modes carried the same cargo, the same distance. It is important that we continue to promote marine commerce as an efficient and environmentally friendly mode of transportation. Big things are happening in the Great Lakes Seaway System. The Seaway and its users are engaged in an unprecedented period of infrastructure reinvestment,

which includes the rehabilitation of the U.S. and Canadian lock and channel infrastructure and the construction of dozens of new Seaway-sized vessels. Moreover, existing vessels on the Great Lakes are being repowered and retrofitted in unprecedented numbers, and ports are upgrading their infrastructure throughout the System. The size and scope of these public and private infrastructure investments are enormous and will have significant positive impacts for decades to come. All of this gives me reason to be encouraged and optimistic. And, it gives me reason to be busy! Here at the SLSDC, we are preparing for the future by renewing our infrastructure, adopting cutting-edge navigation technologies protecting the Great Lakes from the introduction of aquatic invasive species, and playing a vital role in supply chain management in North America. These collective efforts together with a vigorous effort to increase utilization of the Great-Lakes Seaway System as an environmentally friendly, cost-efficient transportation route offer us tremendous opportunity to strengthen our role in domestic, bi-national, and international commerce. n

Trade Winds

Waterway generates substantial cross-border trade

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ccording to an economic impact study of the Great Lakes-St. Lawrence Seaway system, Great Lakes ships transport more than 36 million tonnes of goods annually between Canada and the U.S., with Canadian carriers accounting for all but a small proportion of the traffic. With the Canadian and American economies set to expand over the next few years, shipowners and ports are looking to get a bigger slice of the transport business from companies exporting/ importing between the two countries. “The Great Lakes and St. Lawrence river is the longest deep-draft inland navigation system in the world and a major economic driver for the region,” says Bruce Hodgson, market development director of the St. Lawrence Seaway Management Corporation. “This marine highway connects Ontario and Quebec to a huge American population and manufacturing centre. Marine shipping between the provinces and the states have been going on for decades, but we want to do more.” Minerals, Metals and Machinery

Great Lakes “ ships transport more than 36 million tonnes of goods a year between Canada and the U.S.

”

Mining companies, steel and machinery manufacturers and energy providers specifically located their operations around the Great Lakes over the years to have direct access to both natural resources and waterborne shipping. The navigation system, for example, handles more than 80 per cent of the iron ore used in the U.S. steel industry and supports the activities of more than 60 steel manufacturers in Ontario. It’s an integrated, micro-economy with coal and iron ore used in the production process and resulting steel products regularly travelling between the two countries. “There’s a tremendous amount of trade in commodities going back and forth across the border. Close to a quarter of all the tonnage being transported on ships on the Great Lakes-Seaway System is cross-border traffic,” says Wayne Smith, senior vice-president of

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Trade Winds commercial for St. Catharines-based Algoma Central Corporation, which owns the largest Canadian flag fleet of bulk carriers operating on the waterway. “Not only do our manufacturing, mining and agricultural clients have customers in both countries, but many of them have bi-national operations. They are transporting raw materials between their different facilities throughout the Great Lakes region.” In addition to iron ore for steel production, Algoma vessels carry American and Canadian grain to transshipment ports in Quebec for export overseas, aggregates originating largely from Lakes Huron and Michigan quarries that are used in construction across the Great Lakes region, coal from both countries used in energy production, and salt from Compass Minerals’ (Sifto) salt mine in Goderich, Ontario, which ends up in about 1400 municipalities, villages and townships in Canada and the U.S that rely on its deicing salt for the safety of their community. Between 2013 and 2015, Algoma Central will add eight new vessels to its fleet — two of which are owned by CWB (the former Canadian Wheat Board), and

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Smith says the efficiency gains from these state-of-the-art ships will benefit both cross-border and international trade via the Seaway. Smith says, “Algoma’s new Equinox Class vessels are designed to maximize cargo sizes and efficiency in voyages through the St. Lawrence Seaway. The Seaway is not only an essential conduit for cross-border trade in commodities between Canada and the United States, it also provides an essential link to international markets for Canadian and U.S. shippers.” Another carrier involved in Canada-U.S. trade via the waterway is Port Dover, Ontario-based Lower Lakes Towing, a subsidiary of Rand Logistics. The largest percentage of its business is cross-border, such as Marquette, MI to Sault Ste Marie, Cleveland to Toronto/ Montreal, Goderich to Michigan ports. “Cross-border trade has always been historically strong on the Great Lakes,” explains Jim Siddall, vice-president of operations. “Our niche was picking up pre-existing cross-border trade that had been “lost in the shuffle” as the industry grew to bigger ships.”

The Lower Lakes group of companies, which also includes the U.S. subsidiary Lower Lakes Transportation, operates smaller river-class vessels and transports dry bulk commodities such as aggregates, salt, grains, ore, coal, coke and oxides for foundries. One strategy to increase cross-border trade is “the repowering of vessels to make them competitive and efficient,” Siddall says. “They’re great marketing tools but more importantly extend the life of the vessel and its competitive capacity.” In 2011, the steam-powered Michipicoten was converted to diesel power at a cost of $15 million, adding another 20 years to its lifespan and reducing fuel use and carbon emissions by more than 40 per cent. G r o w t h Opp o r t u n i t i e s But where does the marine mode go from here in terms of targeting new business? Bill Anderson, director of the Crossborder Transportation Centre at the University of Windsor, says that so far the economic case for cross-border shipment of containers has been difficult to make, but that it shouldn’t be ruled

In

2013, Aluminerie Alouette — whose aluminum smelter in Sept-Iles, Quebec is the largest in the Americas renewed its long-time contract with McKeil Marine to transport aluminum ingots from Quebec to various destinations, including Toledo, Ohio, Oswego, New York and Detroit, Michigan. The aluminum is eventually used in the manufacturing of automobiles, beverage cans, outdoor furniture, building supplies, among other uses. The partnership has grown over the past eight years and Aluminerie Alouette expects 650,000 tonnes to be carried via barge over the next three years. Donald Gallienne, special projects manager for Aluminerie Alouette, says: “Having this inland navigation system by barge has been a great resource for our company since 2005. We can ship our aluminum by water directly to our U.S. customers in the Great Lakes, which is still the heart of North American manufacturing. Using the Blue Highway helps us lower our transportation costs, which is an important part of the financial equation of exporting. “At the same time, we’re improving the sustainability of our logistics chain. Since we’ve been using McKeil barges, we have considerably reduced the presence of heavy trucks on our unique two-way road connecting us to the market and also our greenhouse gas emissions by more than 200,000 tonnes.“

Cross-border Success Story out completely for the future. Past studies into some proposals have shown that the efficiencies of using marine for containers were off-set by costs related to time delays and the door-to-door convenience factor of using trucks. “People are resistant to change. You need to have a really compelling business case to make them give it a try,” Anderson says. “If you look to the future, if we see petroleum prices go up, that might change the picture. Generally, it’s much more fuel-efficient to move goods by water.” He adds: “To some extent, the whole question of truck driver shortages, where there aren’t enough drivers available at the prices carriers are willing to pay, may also be a factor. If you use rail or marine, they are much more efficient in terms of labour used. These trends may be beneficial.” Lower Lakes’ Siddall adds that once state authorities fully recognize the environmental benefits of Great Lakes vessels versus land-based transport, and waterborne infrastructure is properly supported with dredging and dock upgrades, the door could be opened to other types of trades such as containers. 25

In the shorter term, Anderson sees opportunities in the large infrastructure projects that will be needed in the coming years. “Great Lakes shipping is an underappreciated resource. It’s not just the role it plays in terms of moving commodities, it’s the role it plays in supplying big industrial and infrastructure projects. In Windsor, we have a major highway project going on — the materials are coming on ships. But ships are also carrying huge components for wind farms and refineries,” he says. “At some point, governments are going to find money to do more infrastructure as a lot of stuff is crumbling — highway projects, bridges, waste water and treatment plants.” John Grech, vice-president of business development transportation for McKeil Marine, agrees that renewal and construction growth over the next few years as the North American economy recovers will bring more business. The Hamilton-based tug and barge operator regularly hauls constructionbound aggregates between the two

countries and is able to easily reconfigure its barges to carry oversized cargo. Last year, McKeil Marine transported massive oversized components manufactured by Cherubini Metal Workers Ltd in Dartmouth, Nova Scotia to the Port of Monroe in Michigan to be installed in DTE Energy’s power plant. Grech also sees more opportunity to create regular movement rotations with its new barge Huron Spirit in the Upper Great Lakes. The barge is already being used to transport steel coils from a Canadian loadpoint to Detroit, Toledo, Cleveland, Chicago and Burns Harbor. Grech explains: “We are calling on as many as five U.S. destinations at a time. There’s some interesting efficiencies there. We’re also able to manage an inventory of small loads and split loads to multiple ports in a single voyage.” He says having this flexibility and the ability to reach some shallower docks that have been less accessible in the past — due to the Huron Spirit’s special shallow draft design — could bring in new customers that have previously not used marine. n With files from Kathlyn Horibe 25

Trade Winds

New investment & initiatives

cut cross-border costs & hassles By Kathlyn Horibe

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anadian ports and other industry players are investing in new infrastructure and services that take cost or hassle out of using the navigation system in a bid to win more trade.

“We’re responding to customer demand by making marine shipping easier and more flexible” The St. Lawrence Seaway Management Corporation has toll discounts in place for new cargoes travelling between Canadian cities or Canadian and American destinations. “Part of the rationale behind the toll discounts is to encourage companies to use vessels to transport additional cargoes like containers, oversized machinery and break bulk products between cities,” says Bruce Hodgson, director of market development for the St. Lawrence Seaway Management Corporation. At the Port of Windsor — where the vast majority of cargo is either being exported from Canada or imported from the U.S. — President and CEO David Cree points out: “One important service within the port facilitating cross-

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border trade is the ferry service that moves trucks containing hazardous and oversized materials between Windsor and Detroit. “In addition, the Windsor Port Authority is working with Borealis Infrastructure and CP Rail to construct a new clearance railroad tunnel under the Detroit River. This will greatly facilitate the movement of cargoes between Canada and the United States and strengthen the Port of Montreal’s competitiveness into markets in the U.S. Midwest.” To attract more cross-border and international trade, the Hamilton Port Authority (HPA) recently launched MarineGateway.net. The new online cargo and capacity matching service provides a simplified way to move bulk, breakbulk and project cargo by connecting shippers with available vessel capacity. “For many years, we’ve known that marine shipping is green,” says Ian Hamilton, vice-president, business development, HPA. “It’s also cost effective but it hasn’t always been seen as the most convenient, especially when it comes to smaller loads.” He added, “MarineGateway.net

fills a niche by putting top-up capacity out there for shippers and freight forwarders to consider, making it more viable to choose marine for smaller loads. By finding cargo for some of this otherwise unused marine capacity, it delivers a win-win for cargo owners and shipping lines.” When shipping lines have room onboard vessels travelling to or from global destinations, they post their capacity and notify cargo owners of availability. In turn, cargo owners post cargo they need shipped and request confidential quotes from a list of prequalified suppliers. It’s a one-stop shop that can also connect shippers with quotes for insurance, storage and stevedoring. The service is free and it takes just a few seconds to sign up. HPA is inviting shippers, shipping lines, freight forwarders, 3PLs and other suppliers to sign up at www.marinegateway.net to begin receiving capacity notifications and cargo quote requests. “We’re responding to customer demand by making marine shipping easier and more flexible,” says Hamilton. n

Trade Winds

Great Lakes-Seaway shipping helps build

new World Trade Center By LEO RYAN

The unique, heavy-lift shipment traveled 1,500 nautical miles via the St. Lawrence waterway and the Atlantic seaboard.

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bold, stunning addition to the New York skyline, One World Trade Center (WTC), has become the tallest building in the Western Hemisphere thanks in no small part to the massive steel spires manufactured in Terrebonne, Quebec which were shipped by barge from the Port of Valleyfield to Lower Manhattan. The unique, heavy-lift shipment traveled 1,500 nautical miles via the St. Lawrence waterway and the Atlantic seaboard. The spires today make up the 408-ft antenna crowning what has rapidly become an iconic landmark replacing the former WTC destroyed by terrorists on 9/11. Standing 1,776 feet high, the 104-storey building was substantially complete in late 2013 after the 18 sections of steel comprising the spire had all been installed in the spring. The sections were supplied by ADF Group, which designs and manufactures complex steel structures. Previously, France’s Vallourec delivered the steel tubing used in manufacturing the 27

antenna to ADF in Terrebonne. This tubing was carried across the Atlantic from Europe on a Fednav service. Once constructed, the nine largest segments were transported by barge, while the nine smaller units were subsequently shipped by truck. They ranged in weight from five tonnes to more than 67 tonnes. Shipping the largest units was not feasible, logistics-wise, by surface transportation. The heaviest cargo had departed on November 16, 2012 onboard a barge pulled by the Atlantic Salvor tugboat of New Jersey-based Donjon Marine. The shipment proceeded through the St. Lawrence River and the Gulf of St. Lawrence and along the East Coast to Port Newark, prior to transfer to Lower Manhattan. “The biggest potential challenge we faced was the time of year on the North Atlantic, but we were lucky with the weather and the journey of some 1,500

miles went smoothly,” recalls Steven News, senior vice-president of Donjon Marine. “At one point, we thought we might have to stop at Canso off the coast of Nova Scotia, but we were able to sail without delays along the East Coast right down to New York.” “Valport’s crew became very thrilled when it was determined that we would provide services for the tower,” says Frank Dunn, president of Valport Marine Services, which handled the stevedoring at Valleyfield. “We also take particular pride in the fact,” he adds, “that the sections were assembled right on port property, a couple of hundred metres from dockside. These units had to be manipulated to an upright position and prepared for loading onto the barge. Given the time of the year and routing, special emphasis had to be taken to secure the cargo for safe passage. This took a lot of coordination between the design engineers, the carrier and our team of stevedores.” n 27

Trade Winds

The Panama Connection Bigger ships are heading up the St. Lawrence River By Carroll McCormick

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n a significant decision, the Canadian Coast Guard last spring increased to 44 metres the maximum width of ships it will allow to travel upstream of Quebec City on the St. Lawrence River. This is welcome news to the Port of Montreal, which will now be able to receive the larger ships that will begin passing through the Panama Canal once the eight-year project to widen it is completed in 2015. The St. Lawrence River may also see an increase in shipping traffic due to the widening of the Panama Canal. Some ships carrying cargo destined for the North American heartland may bypass West Coast ports, take advantage of the widened Panama Canal and sail around to ports on the East Coast and the St. Lawrence River. “The sweet spot in all this is the North American heartland: finding the [best] balance between speed and [transportation cost] between origin and destination. Is it more cost effective to

“By 2016 about 60 per cent of global trade will move on Post-Panamax or larger vessels.”

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bring containers to Prince Rupert and then by train to Chicago, or to bring ships to East Coast ports and then move them inland from there?” asks Wendy Zatylny, president of the Association of Canadian Port Authorities. Transshipment ports in the Caribbean may also get more big-ship business, feeding smaller vessels destined for North America’s East Coast ports. “We expect a cascade effect; for example, we [already] have a route from Freeport, in the Caribbean, to Montreal. We may get bigger volume from Freeport and other ports,” says Yves Gilson, marketing manager, Montreal Port Authority. The Panama Canal opened in 1914. The largest container ships it can accept, referred to as Panamax ships, carry around 5,000 TEU (20 foot-equivalent units). This is a standard, although approximate, way of referring to the carrying capacity of a container ship. Once the widening is completed, far larger ships, referred to as New-Panamax

or Post-Panamax ships, and capable of carrying up to 13,000 TEU, will be able to squeeze through the Panama Canal. The Port of Halifax has already been servicing Post-Panamax ships for at least 10 years. “By 2016, about 60 per cent of global trade will move on Post-Panamax or larger vessels,” comments Paul Duvoisin, vice-president commercial, Halifax Port Authority. “Halifax expects to continue and grow receiving Post-Panamax or larger vessels via the Panama and the Suez.” With the Coast Guard rule change, Montreal will be able to accept these ships, including container ships up to 6,000 TEU. None this large have visited Montreal yet, but the Port did set a new size record when it received a 4,800 TEU ship this past May. It is one thing to berth such ships at a port, but rapid and efficient container handling is a different kettle of fish. Realizing that at 1.6 million TEU a year

Trade Winds it was close to capacity, the Montreal Port Authority has launched two projects that will increase the Port’s container capacity by 12.5 per cent, or over 200,000 TEU. First, the Hochelaga Terminal is being redefined from being a bulk products area to being a container terminal. It will offer an additional capacity of 150,000 TEU. This $40-million project will be finished in May 2014. “This terminal will be used to handle excess container capacity. It is built so an operator can install cranes and make it an autonomous container terminal,” Gilson says. “The terminal will be able to handle the largest ships that can come up the St. Lawrence River.” At the same time, the Montreal Port Authority is modernizing the Maisonneuve Terminal, operated by Termont, to increase its capacity by 50,000 TEU. Questions about other possible opportunities present themselves in the wake of the larger ships that will soon be transiting the Panama Canal. For example, will the St. Lawrence River see larger liquid and dry bulk ships? Does the arrival of Post-Panamax container ships

mean that shippers can finally make a business case for transloading containers from the big ships onto ships sized to pass through the St. Lawrence Seaway? Jacques Paquin, vice-president marketing and business development, Trois-Rivierès Port Authority, says it is hard to tell whether a widened Panama Canal will translate into larger liquid and dry bulk ships coming up the St. Lawrence. “We know that the widened Panama Canal will be used mostly by the container business. As far as we can tell at the moment, only the container lines are preparing themselves for that. “Regarding dry and liquid bulk, it is not clear, even when you look at the market analysis prepared by the Panama Canal Authority, how the market will react. The tanker fleet is already in a position to take advantage of a widened Panama Canal, while the waterway restrictions in many ports handling dry bulk may prevent the use of bigger dry bulk carriers.” Assessing impact on the Seaway The idea of transloading containers to ships that can go up the Seaway into the Great Lakes system has been around

for years. For example, in 2008 McKeil Marine moved a barge carrying 68 containers from the Port of Hamilton to Montreal, demonstrating how shortsea shipping can be an alternative to transporting containers to and from the heartland by rail or train. The presence of more Post-Panamax container ships may seem heartening to proponents of shortsea shipping, but significant barriers remain; e.g., added handling costs, regulatory issues and seasonal service caused by the annual winter closure of the Seaway. “In time, if East Coast ports reach capacity, we could see an increase in Seaway traffic, but not in the foreseeable future,” says Bruce Hodgson, director of market development, St. Lawrence Seaway Management Corporation. “Everything I hear is that there is potential and interest, but there are public policy and regulatory barriers that are not allowing this to come to fruition,” says Zatylny. “[But] I think the real issue in the expansion of the Panama Canal is what it is going to mean for existing container ports and how the traffic will rebalance between the west and east coasts.” n

“We expect a cascade effect; for example, we

[already] have a route from Freeport, in the Caribbean, to Montreal. We may get bigger volume from Freeport and other ports.”

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Regulatory Horizons

Shortsea Shipping Industry rallies behind call for an international definition, recognition and promotion

Photo Credit: Robert Welton

By Julie Gedeon

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anada Steamship Lines (CSL) is seeking a global definition of shortsea shipping to ensure the International Maritime Organization (IMO) and other regulatory bodies take the mode’s regional characteristics into account before proposing new rules. “It’s essential to understand shortsea shipping’s huge economic impact and environmental advantages, and how quickly these can be lost to other, less environmentally friendly modes if this sector faces regulations that rail

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and trucking don’t,” says Kirk Jones, CSL’s vice-president of sustainability, government and industry affairs. Jones says national shipping organizations must do a better job of providing governments with the relevant socio-economic and environmental data to ensure they understand the value of promoting the shortsea shipping sector. CSL has spearheaded this effort by hiring Research and Traffic Group, a consulting firm with 20-plus years of expertise in transportation studies, to prepare an independent report

titled Define, Defend and Promote: The Need to Differentiate Shortsea Shipping from International Shipping in the Application and Development of IMO Conventions and National Regulations and Policies. Using data gathered from previous research done within the past few years, the report estimates the worldwide shortsea shipping fleet at close to 16,000 vessels with a combined deadweight tonnage (DWT) of 77 million tonnes. The business impact in the Great Lakes-St. Lawrence

Regulatory Horizons Seaway corridor for Canada and the U.S. alone is pegged at $35 billion annually with 227,000 jobs. “The report shows how vital shortsea shipping is for the economy, employment and environment in many parts of the world,” Jones says. “It also clearly indicates that, unlike transoceanic vessels, shortsea shipping is nearly always in direct competition with railway and trucking companies and can readily lose its business to them if faced with requirements they don’t have.” Based on the consulting firm’s analysis of shortsea shipping worldwide, CSL has proposed defining shortsea shipping as: the commercial shipment of cargo or passengers by domestic and international maritime transport, which generally operates in coastal and inland waterways, does not cross an ocean and often competes with road and rail networks. Article continued below

Another of CSL’s recommendations calls upon the International Chamber of Shipping (ICS) to separately ensure shortsea shipping interests at the IMO. “I’m really pleased that the directors of the ICS will vote in February (2014) on whether to establish a permanent shortsea shipping panel,” Jones says. The proposed definition and call for stronger international representation are gaining broad support. “Shortsea shipping in Canada is able and willing to provide much greater economic, social and environmental advantages to North America,” says Stephen Brooks, president of the Chamber of Marine Commerce. “But it can’t be straitjacketed by international policies that make no sense regionally and, in fact, risk causing more environmental damage than good.” Recognizing distinctions between coastal and ocean trades “Regional implications must be considered,” he adds. “For coastal

getting more involved in the relevant organizations and discussions,” he says. The report outlines the various concerns. “It establishes a global framework for shortsea shipping to be proactive so that we can avoid drafting unfair regulations in the first place,” Jones says. “Shortsea shipping is committed to improving its environmental performance and sustainability, but it can’t be at the expense of running us out of business.”Jones hopes CSL’s recent presentation to the Canadian Marine Advisory Council (which was created by Transport Canada as its consultative body on marine issues) will lead to Canada officially submitting the proposed definition to the IMO, as well as the mechanism for protecting and promoting shortsea shipping interests. Given transportation’s overall impact on climate change, Brooks says there’s no time to waste in facilitating

“Shortsea shipping is committed to improving its environmental performance and sustainability, but it can’t be at the expense of running us out of business.”

“It’s possible we’ve overlooked something, but this definition is certainly a good base for discussions,” Jones says. Mechanism urged to evaluate conventions CSL is asking IMO administrations to establish a mechanism to always evaluate the potential impact of proposed international conventions on shortsea shipping. “We’d also like national governments to first consult with their shortsea shipping sector as a part of this process,” Jones says. 31

trades, for example, the demand to move to cleaner, more expensive fuel under the North American Emission Control Area (ECA) 200 nautical mile zone could easily result in cargo shifting to landbased modes that aren’t subjected to the same expenses and are significantly less environmentally friendly.” Jones says the industry has to do a better job of making government representatives aware of the sector and shipping logistics in general. “It’s time for us to assume real leadership in defending and promoting our interests domestically and internationally by

shortsea shipping as the most efficient mode. “There’s such great potential for shortsea shipping throughout the Great Lakes-St. Lawrence Seaway, for example, where there’s tons of capacity and our ports are the envy of the world,” he says. “But we need to have the IMO and governments on side.” The full report is available online or as a downloadable file at http://www.cslships.com/en/shortsea-shipping-report. n

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Regulatory Horizons

Political Waves: From the helm of the Marine Industry Caucus By Rick Dykstra, PC, MP (St. Catharines, ON)

In spite of this success, the industry still faces challenges that we must work on together. While no new aquatic invasive species have been found in the Great Lakes since 2006, both Canada and the United States are considering new regulations on ballast water.

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ccording to a 2011 study, maritime commerce on the Great Lakes and St. Lawrence Seaway supports roughly 227,000 jobs and $35 billion in economic activity in Canada and the United States. As an elected representative from a city on the shore of Lake Ontario, I see the economic impact that the marine industry makes on coastal communities like mine every day. Our government has made it our top priority to focus on economic growth and job creation across Canada, and I’m glad to say that during my time in Parliament the Canadian government has strengthened the Canadian economy as a whole, as well as delivering results for the marine industry. These include: • removing a 25 per cent duty on foreign-built cargo vessels and tankers, allowing for a revitalization of the Canadian fleet; • implementing a system of fleet averaging for measuring sulphur emissions; and, • taking a balanced approach in our 2006 ballast water regulations, which minimized costs for maritime job creators while protecting the environment. 32

The current proposal from the United States would require ballast water treatment systems for Canadian domestic vessels that never leave North American waters. While everyone in the industry agrees that ballast water treatment is necessary to protect the environment from invasive species that may be found in transoceanic ships, the need to protect the waters of the St. Lawrence River from species living in the Gulf of St. Lawrence that it naturally flows into is more suspect, and many of my fellow Members of Parliament agree. Canadian Members of Parliament have been receptive to the industry’s concerns, because they affect so many people in our communities. The industry’s jobcreating businesses are important to the Canadian economy and important to our communities. That’s why the Government of Canada has been able to take action to help the marine industry, like removing the duty on foreign-built vessels. That’s why my colleague Larry Miller’s private members’ bill, the Transboundary Waters Protections Act, was passed without a single vote cast against it. Larry’s bill ensures the Great Lakes will be protected from forms of diversion for the purposes of bulk water removal, and I am very pleased this legislation is now in place to protect these important bodies of water.

If the marine industry wants to get more reasonable regulations, it is vital for people in the industry to speak with a clear message to elected representatives from the affected communities in both Canada and the United States. Americans reap half the benefits of economic activity on the Great Lakes and St. Lawrence Seaway and it’s important for American legislators to see how this industry affects their communities. The maritime sector creates local jobs, moves goods quickly, and produces a much lower carbon footprint than moving goods by rail or truck. Without reasonable regulations, jobs in this sector will be threatened, costs for consumers will be increased, and the environment will be worse off than it was before. That’s a message that makes sense to Canadians, and it’s a message that should appeal to the common sense of Americans too – but we need your help to make sure the message gets through. When the State of New York was considering unreasonable regulations on ballast water, our appeals to New York’s elected officials got through. If we are going to make progress in ensuring more reasonable regulations from both governments, the marine industry needs to reaffirm to elected representatives the importance of a balanced approach to regulation that preserves their communities’ local jobs, economic growth, and long-term prosperity. This has always been a very important industry for the Niagara Region, and I have enjoyed working with the stakeholders in this sector immensely. I look forward to continuing to build on this great working relationship as the marine industry moves forward to confront new challenges. n

Regulatory Horizons

More ballast water regulations? Government’s big stick not the answer

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s a guy from a dried-out chunk of Western Canada, I’m amazed whenever I get the chance to get east and stand on the shore of one of our Great Lakes. They are so vast, beautiful and providentially situated that it’s no surprise they have stood at the centre of Canadian history for the last 400 years. They helped build the nation. Today, they sustain the nation; in turn we must sustain them. I choose my words carefully. Canadians are enormously fond and proud of the inland sea in the middle of our map; North America’s more rugged and fresh answer to Europe’s Mediterranean. We are also concerned for her future. Being economically important isn’t enough. The lakes also need to be clean and healthy. Canadians rightfully expect that it’s possible to grow the economy, develop our resources and trade while also maintaining healthy ecosystems. They want the jobs AND they expect to be able to eat the fish out of the local lake. Finding that balance is one of the many things Canadians do well, and we have a record to prove it. Canada’s conservation groups long ago figured out that if you want to get important things done, then cooperation is the answer. For decades, they have partnered with Canadian business and governments to clean-up, maintain and preserve our natural heritage. Ducks Unlimited, the Nature Conservancy of Canada, Delta Waterfowl and hunter and angling clubs have used that cooperative approach to preserve and restore millions of acres of land and wetlands. Without question, Canada’s air, land and water is cleaner today than it was a generation ago. Cooperation 33

and being practical has a track record. It works. So why aren’t governments encouraging cooperation and practicality when it comes to invasive species in the Great Lakes? The United States Environmental Protection Agency’s proposed new ballast water requirements would mean a $5 million retrofit for a typical $30 million dollar Great Lakes freighter. The hope is that cleaning ballast water from lake to lake will prevent the spread of invasives that already live in one or some of the lakes. Invasives are not an issue that should be taken lightly. About a third of the 185 non-native species have come to the Great Lakes from beyond our oceans, though no new ones since new procedures were put in place in 2006. But in this case, they are already in the lakes and they all naturally spread through the water. If they don’t swim, they can hook a ride on a pleasure craft, a duck or a current. As I’ve noted before, spending some of that extra $5 million per ship on other proven environmental measures could far outweigh the theoretical benefits of new ballast water rules. In a world where there’s only so much money available, shouldn’t it be our obligation, then, to determine the most effective ways to deploy capital to help the environment? If so, then wherever we can, shouldn’t we leverage the efforts of others? Leveraging the work of governments and conservation groups to restore wetlands would unquestionably clean the water, provide habitat for fish and animals, sequester carbon and provide recreation for thousands of people. And they do it in perpetuity. Restored wetlands are a natural legacy that will benefit our children and grandchildren.

The Honourable Monte Solberg P.C. A former federal cabinet minister and a principal at New West Public Affairs, he is working with others to encourage cooperation and practical solutions to protect both jobs and the environment.

Even leaving the money where it is can have positive environmental benefits. An extra $5 million dollars in the pockets of ship owners means they can more quickly purchase new and more energy efficient ships that emit fewer GHGs. There are more effective approaches than regulation. Better to encourage cooperation than to pull out the government stick. n 33

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Stakeholder Views

In their own words … To keep their businesses strong, U.S. and Canadian electric utilities, steel mills, construction companies, mining companies, manufacturers and farmers all depend on the 164 million tonnes of cargo delivered by Great Lakes vessels every year. In their own words, some of North America’s biggest corporate names explain why the navigation system is vital to their operations. system. Additionally, ArcelorMittal mines in Canada and the United States ship raw material via the waterways to sister sites and other consumers in North America, Europe and the Middle East.

ArcelorMittal is the world’s largest steel and mining company, operating nine facilities in the Great Lakes basin, spanning both Canada and the United States. Together, the Great Lakes basin and the St. Lawrence Seaway are a critical element of ArcelorMittal’s business, transporting raw materials to its operations, shipping finished product to its customers and playing an important role in the steelmaking process. ArcelorMittal employs 10,000 Canadians across 13 Canadian operating sites in mining as well as tubular, long and flat carbon steel. Our steels are the fabric of life: they are helping to achieve aggressive fuel efficiency targets in autos through light-weighting; they are the foundation of sustainable green buildings; they are the backbone of skyscrapers and stadiums and are found in many of the products of modern life.

While the vast majority of the steel produced in Canada and the United States is consumed in North America, business conditions can become a motivating factor for ArcelorMittal to utilize the Seaway to reach other international ports. The cyclical nature of the steel industry, combined with currency rates provides ArcelorMittal with flexibility to respond to demand from other countries. Also key to ArcelorMittal’s use of waterways is the environmental benefit. We recognize that a seaway-size vessel (30,000 tonnes) can carry as much as 300 train cars or 963 trucks and that vessels operating on the Great Lakes

are seven times more fuel-efficient than trucks, which contributes to substantially less Green House Gasses being emitted. Improvements including recent investments in new fleets by both Algoma and Canada Steamship Lines further increase these net benefits. The Great Lakes-St. Lawrence Seaway system is vital to ArcelorMittal and the communities in which we operate. It maintains a rich biodiversity, provides fresh water essential for survival, and supports industry, employment, shipping and tourism. The waterways provide ArcelorMittal with a safe, efficient and sustainable mode of transportation, contributing to our commitment to produce safe sustainable steel. — Brian Benko, Vice-President Procurement and Information Technology, ArcelorMittal Dofasco

The Great Lakes-St. Lawrence Seaway system provides a critical business advantage for ArcelorMittal. It provides a direct, cost-effective and sustainable method of transportation for raw materials and finished product for both domestic and international shipping. In total, ArcelorMittal’s four integrated mills on the Great Lakes consume more than 30 million net tons of raw materials each year which is delivered via the Great Lakes / St. Lawrence Seaway 35

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Stakeholder Views

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reat Lakes-Seaway shipping is essential to the successful operation of Redpath Sugar but also for keeping the cost of sugar down for Canadian consumers. Like many of our competitors, Redpath imports raw sugar extracted from sugar cane grown by farmers in tropical countries such as Brazil, Costa Rica, Nicaragua, Guatemala, El Salvador and Mexico. It is transported through the St. Lawrence Seaway to Lake Ontario and then made into different sugar products at Redpath’s refinery on the Toronto waterfront. The direct water route from source to refinery is by far the most economical way for us to transport our raw sugar. In fact, Redpath specifically constructed its refinery on the Toronto waterfront in 1959 to take advantage of the opening of the Seaway to larger ships and to target the food processing hub growing between London and Peterborough— today one of the largest in North America. This was a successful strategy and our products are now not only used to sweeten coffee and tea in major restaurant chains but as a staple ingredient in many Canadian household food brands and baked goods. Redpath Sugar imports in excess of 500,000 tonnes of raw sugar through the Seaway each year. The company employs 430 people at its Canadian operations in Toronto, Niagara and Belleville. Without access to marine transportation via the Great Lakes

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and the Seaway, we would have to evaluate the viability of remaining at the current location because trucking these huge volumes over 500 kilometres of overcrowded highways could prove prohibitive and would ultimately lead to higher prices for consumers. It would also have other repercussions. Great Lakes ships emit the lowest carbon emissions per tonne kilometre and have the best safety record compared to

other modes. Using marine shipping as part of our logistics strategy helps us to minimize our impact on the environment and the community. Marine transportation is definitely our preferred mode to transport our raw sugar, a fact we have underlined recently by investing $11 million in a new conveying system and ship unloader at our docks in Toronto. — Jonathan Bamberger, President Redpath Sugar

Stakeholder Views

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f you live somewhere in the eight Great Lakes states or in Ontario, then you have likely been in a building, crossed a bridge or walked on a street built with products made by St. Marys Cement.

Other modes of transport can come in contact with high volumes of traffic and people, with increased risk for accidents.

happening that may affect our marine distribution network, including lake water levels and regulations.

We have invested significantly in marine transportation, and will be operating four barges and a tug, along with having long-term contracts with other ship operators in the coming season. As a result, we keep a close eye on what’s

We need the navigation system to operate efficiently for our business to run efficiently. — William Asselstine, Vice-President Logistics, St. Marys Cement (Group Votorantim)

Since St. Marys Cement was established in 1912, we have participated in such landmark projects as the CN Tower, Roy Thompson Hall, Maple Leaf Gardens and the Darlington Nuclear Station, as well as countless other engineering, civic and residential projects that significantly contributed to the growth and prosperity of the region. Today, St Marys Cement is a wholly-owned subsidiary of Votorantim Cimentos, an international cement manufacturer based in Sao Paulo, Brazil. With its North American operations headquartered in Toronto, the business has a network of terminals situated throughout the Lakes, eight of which are served by barge, rail and truck. Vessels are also used to bring in raw materials for the manufacture of clinker and cement at our plants in Bowmanville, Ontario, Charlevoix, Michigan and Detroit, Michigan. We also use marine to transport the clinker (a material produced in the first step of cement manufacturing) and our finished products (cement, concrete, and aggregrates) to cities around the Great Lakes. It is the most cost-effective and efficient way for us to move these materials, particularly given the volumes involved, which helps us remain competitive in our business. But it’s also a greener and safer way for us to move our products.

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Stakeholder Views

Efficient, sustainable transportation on the Great Lakes and St. Lawrence Seaway is essential to Compass Minerals and the communities served. Without it, the company would be

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ow do you transport life-saving highway deicing salt to municipalities in North America?

As North America’s leading producer of rock salt, Compass Minerals transports product using self-unloading vessels – the most efficient, environmentally friendly and cost-effective transportation. Compass Minerals’ Goderich, Ontario, mine has a deep-water port on Lake Huron that allows the company to directly load ships for efficient transportation to more than 35 storage depots around the Great Lakes and St. Lawrence Seaway. Once at the depots, Compass Minerals utilizes self-unloading equipment for the off-loading of the deicing salt and ensures product is promptly covered in accordance with the company’s product stewardship criteria. From the depots, Compass Minerals is able to serve approximately 1,400 municipalities, villages and townships that rely on the deicing salt for the safety of their community. Transportation via vessel is not only more efficient, but also allows Compass Minerals to minimize emissions. On average, the company is able to move approximately 800 truckloads of salt in one vessel. Compared to trucking, the vessels generate 4-8 times less emissions per tonne shipped. Additionally, vessels are more cost effective than trucking, allowing Compass Minerals to expand customer reach, supporting approximately 500 jobs at the Goderich mine.

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challenged to provide economical highway deicing salt that prevents snow and ice-related injuries and enables commerce. — Rick Ruzzin, Senior Director Logistics, Compass Minerals

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Stakeholder Views

Mayors of port communities see growth opportunities amidst infrastructure challenges BY LEO RYAN

Mayors of cities impacted by marine cargo activity were asked what they see as the main opportunities and challenges to bring about further growth in this industry for their region.

City of Hamilton Bob Bratina, mayor of the City of Hamilton on Lake Ontario, is bullish about various developments in recent years and sees strong opportunities ahead. But he underscores the need to meet infrastructure demands at Canada’s largest port on the Great Lakes. “Over the last five years,” he recalls, “Hamilton has experienced significant diversification in goods movement through our Port. Although steel remains the dominant industry and port user, agri-food and related products now account for close to 30 per cent of the total annual tonnage.” Bratina affirms that the issues and challenges facing the community “relate primarily to our transportation infrastructure.” “Municipalities alone, especially older municipalities, cannot be responsible for the maintenance, upgrades, and development of new road, rail and bridge infrastructure related to the Port. Without reliable and effective goods movement, ports on the Great Lakes will simply be unable to perform at a competitive level.” In Bratina’s view, there are three major opportunities linked to marine cargo activity. “The first arises from escalating energy prices and rising costs of shipping products. It is a proven fact that transporting goods by water is the most economical mode currently available and also possesses the highest load-carrying capacity. “The second opportunity relates to an emerging trend that involves the repatriation of ‘off-shoring’ of manufactured goods. As a port city, the industrially-zoned lands on our waterfront offer ideal locations for manufacturing, assembly and warehousing.” Finally, Bratina observes that climate change is lengthening the shipping season on the Great Lakes. “Certainly, this is a challenge as it relates to Seaway maintenance, but also it presents another opportunity – the potential to dramatically increase the volume of goods moving through our port.”

City of Sarnia Mike Bradley, mayor of Sarnia, considers that a slowing economy, low water levels, and efforts to change the Great Lakes flow levels are all key issues for a number of Great Lakes communities. As the largest city on Lake Huron, Bradley recalls, Sarnia is a busy port. And during the winter months, usually 40 40

Stakeholder Views

a dozen ships dock there for repair and upgrades – contributing up to $15 million in economic impact for 200 businesses in the area. “The biggest challenge ahead is the proposed divestiture of the Harbour from the federal government to a local entity,” Bradley says. The City of Sarnia is working closely with Transport Canada and the user companies to establish a detailed plan so a decision can be made by the first quarter of 2014. “From Sarnia Council’s point of view, the cost of environmental studies, dredging and capital improvements are all key issues before a final decision is made,” Bradley says. “If transferred, the Harbour would operate through a non-profit advisory committee composed of the users and other interested parties.”

The Great Lakes and St. Lawrence Cities Initiative The Great Lakes and St. Lawrence Cities Initiative (GLSLCI) is a bi-national organization that counts over 100 mayors of Canadian and U.S. cities in its membership. David Ulrich, executive director, says: “We are working together to find the balance among the competing interests, meet the challenges, take advantage of the opportunities, and create a sustainable future where shipping continues to play an important role.” In listing some of the best opportunities, he first notes the location of being situated on the shores of the largest source of surface freshwater in the world. Then he points to “having the most energy-efficient means of transporting goods and people.” And thirdly, “It’s taking advantage of the access to water to grow and diversify the economies of the port cities.” Among the greatest challenges, says Ulrich, is balancing industrial and commercial uses, including tourism and residential development in a way that advances economic vitality and quality of life. Another is the weathering of boom and bust cycles that occur during each decade. A way to overcome this, he says, is to establish a diverse economy that supports high-paying jobs. Ulrich further notes the impact of “fluctuating lake levels and changes in climate that limit shipping operations.” Like other officials in the region’s communities, Ulrich evokes the challenge represented by “funding the maintenance of existing infrastructure and investing in new infrastructure.” 41

City of Trois-Rivières Because of his previous occupation as a captain who frequently sailed on freighters on the St. Lawrence River and the Great Lakes, Yves Lévesque has for more than a decade now acted as a widely acknowledged ‘pro-maritime’ mayor of Trois-Rivières, a port city mid-way between Montreal and Quebec City. He was a key architect, along with port president Gaetan Boivin, of a rather unique partnership blueprint that resulted in a substantial reconfiguration of the city’s waterfront at a cost exceeding $140 million. Called On Course for 2020 when it was launched in 2008, the ambitious program has entered its second phase. Whereas the waterfront’s eastern sector has been ceded to a massive real estate-recreational complex, this has been counterbalanced by a marked increase in port operational areas in the western zone. “As a former ship captain who became mayor of a port city, it was a natural step for me to turn my attention to the St. Lawrence River for three kinds of interventions,” Lévesque says. “The three areas identified for special attention are to collaborate with the port authority to expand and develop the port; favour the installation of companies with maritime transport needs; and acquire waterfront properties to convert them into public leisure spaces.”

City of Thunder Bay Keith P. Hobbs, mayor of Thunder Bay on the tip of Lake Superior, expresses confidence that “our port will remain a major economic driver for Thunder Bay and the region, but we’ll need to stay on top of any changes in the industry.” “While being a port city offers a great number of economic opportunities, we also face unique challenges,” says Hobbs. “There is still uncertainty,” he continues, “over the effect that changes to the Canadian Wheat Board will have on our port. In addition, we’re facing competition from the Port of Churchill (Manitoba) – and with Sault Ste. Marie moving toward creating a deep water port of its own, that competition could increase.” On the other hand, observers feel Thunder Bay is well poised to markedly increase its project cargo business (notably wind energy components and oil sands equipment) since installing a mobile harbor crane as well as to benefit from likely increased Canadian grain exports to Europe under the planned Canada-European Union free trade agreement.

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Year Ahead

A Look Through the Spyglass … 2013 was a challenging year for Great Lakes-Seaway shipping due to late harvests of grain and a dip in commodities as the American and Canadian economies continued a slow recovery. But what can we expect for 2014? Industry executives in the know give their forecasts and share their upcoming ventures.

Terence Bowles President and CEO, St. Lawrence Seaway Management Corporation

indications in the market that exports to China from our system will increase. Meanwhile, our incentive programs continue to bear fruit. At the end of September 2013, for instance, just over 2 million tonnes of new business had moved through the system. Thanks to such success, we are in the process of developing a Gateway Incentive to attract cargoes currently moving through other gateways. This program will be introduced prior to the opening of the 2014 Seaway season. n

manage bookings and offer logistics solutions to users. This will be a scheduled service, so shippers can fully integrate the Cleveland routing into their supply chains. The service will be rate competitive, up to four days faster than East Coast routings, and the greenest (lowest carbon emissions) alternative to ship from North America’s heartland to world markets. n

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ith economic forecasts projecting some modest improvements, we expect to witness comparable results in 2014 to last year, with potential for some gains in overall volume from about 39 million tonnes in 2013. In the longer term, too, the recent Canada-European Union free trade agreement holds promise for increased Seaway cargo. We are forecasting grain volume to increase slightly in 2014, as a result of the bumper crop of 2013 and a projected strong start to the season due to “carry-over” inventory, as forecasted by our shippers. Project cargoes are forecast to return to more usual levels in 2014 as a result of increased oilsands activity. Wind turbine volumes are expected to rebound from the low levels experienced in 2013, as a result of the U.S. tax credit for renewable energy now being in place. We anticipate our iron ore volume in 2014 to remain at a similar volume as realized in 2013, as there are no 43

Will Friedman President and CEO Port of Cleveland

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major highlight for the Port of Cleveland in 2014 will be the launching in the spring of the Cleveland-Europe Express Service via the St. Lawrence Seaway. This service is designed for container and noncontainerized shipments to/from North America’s industrial and agricultural production centres. The Port has selected Dutch carrier Spliethoff Group to provide vessels,

Tim Heney President and CEO Thunder Bay Port Authority

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fter coming off the largest grain crop in Canadian history in the Prairie provinces, we anticipate a large carry-over for the port in 2014. There is another elevator, too – Richardson International now has two at the port. We expect to see the strong trend of ocean vessels carrying wheat to Europe to continue in 2014. We also anticipate a resurgence in the project cargo sector, with recent inquiries pointing to a pick-up in wind farms and oilsands-related activity. n 43

Year Ahead

Wayne Smith Senior VP, Commercial Algoma Central Corporation

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ooking to 2014, Algoma is very excited, first of all, about the arrival of several of its Equinox class ships. The first to reach Canada, in the late fall of 2013, was the gearless bulker Algoma Equinox. This ship promises a 45 per cent improvement in energy efficiency with larger size, a higher efficiency Tier 2 engine, and a fully-integrated, IMO-approved exhaust gas scrubber to remove 97per cent of all sulphur oxides from shipboard emissions. Our commercial outlook for 2014 includes an optimistic view for Canadian grain exports following the bumper Canadian crop last summer. The North American steel industry also looks to continue current performance levels with persistent strong demand for steel products in North America such as automobiles. Finally, we expect shipments of construction materials such as aggregate products and cement to continue their long slow recovery from the recession of 2009. n

Frank Robertson Manager Oshawa Stevedoring Inc.

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he outlook for commodities like salt, fertilizer and potash at the Port of Oshawa looks steady in 2014 as does everything related to agriculture. While steel import cargo slowed down in 2013 due to softening demand, volume is still within the five-year average. Highway construction in the Greater Toronto Area will continue to require the supply of steel beams. Thanks in part to several projects in Eastern Ontario, the wind energy sector should remain strong in 2014. n

We expect an exciting, new era in grain transportation with the expanded scope of asset-based grain houses.

F Louis-Marie BEAULIEU Chairman and CEO Groupe Desgagnés

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Dan McCarthy VP, Marketing Canada Steamship Lines

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e expect an exciting, new era in grain transportation with the expanded scope of asset-based grain houses. While this will bring greater market volatility, the fundamentals of efficient and competitive transportation should endure as the main drivers of growth. As in years previous, the export of commodities such as coal and ore will be affected by global trends and indices. But with a logistics chain that is both efficient and robust, we hope demand and pricing will trend favourably. Markets for steel and iron ore in North America continue to recover, albeit gradually. However, cost pressures will remain intense and margins slim. That said, the steel business will continue to represent a significant segment of our market. n

or the year 2014, the ballast water issue is our main concern. Desgagnés will be the first to be affected by the new regulations, due to the size of our ships and their ballast capacity. In all, 10 ships will be subject to the new rules (USCG, VGP-EPA) in 2014 – 2015, and we will be working very hard to find a way to continue operating in conformity with the regulations even if efficient approved technologies are not available. Meanwhile, we will be working on our fleet renewal project, for both the tankers and cargo vessels, developing designs that better meet our needs and in the upcoming year, will begin discussions with various shipyards to eventually proceed with these acquisitions/new builds. We must however adapt ourselves to the market conditions that continuously fluctuate and are uncertain; therefore the scheduling as well as the number of units will be decided in the upcoming months. n

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ADVERTISERS’ INDEX ABS

www.eagle.org 16

Algoma Central Corporation

www.algonet.com Back Cover

Canada Steamship Lines

www.cslships.com Inside Back cover

Chamber of Marine Commerce

www.cmc-ccm.com

DSS

www.dssgrp.com 14

Fednav

www.fednav.com 3

Groupe Desgagnés

www.desgagnes.com Inside Front Cover

Lloyds Register Canada

www.lr.org

45

Lower Lakes Towing

www.randlogisticsinc.com

6

Montreal Gateway Terminals Partnership

www.mtrtml.com

34

McKeil Marine

www.mckeil.com

4

Montreal Port Authority

www.port-montreal.com

42

Ocean

www.groupocean.com 39

Sept-Îles Port Authority

www.portsi.com

24

The St. Lawrence Seaway Management Corporation

www.hwyh2o.com

10

Thunder Bay Terminals Ltd. N/A

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8

21

47

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