The seaway will open March 20 followed five days later by the American Soo locks between Lakes Superior and Huron and the 2017 navigation season on the Great Lakes will be fully underway.

While the seaway finished down by 3.1 per cent in tonnage in 2016 compared to 2015, the gap between the two years nar- rowed during the final months as traffic picked up. The revival in the North American economy has continued albeit cautiously into 2017.

Terence Bowles, president and CEO of the Canadian Seaway Management Corp., said, “All the signs are very encouraging. Canada and the United States are heading for growth rates of two to three per cent and Europe should manage one per cent or better.”

“We expect positive growth over the year,” Craig Middlebrook, deputy administrator of the U.S. Seaway Development Corp. said. “We have more reasons to be optimistic this year than we’ve had recently.”

Both men point to hefty stocks of grain waiting to be exported and little ice on the Great Lakes this year to delay the ships. On top of that, international iron ore prices have risen to levels that justify exporting from the U.S. mines in Michigan and Minnesota. The ratification of the Canada-Europe trade deal in Ottawa and Brussels could boost the flow of Trans-Atlantic traffic later this year.

If the shipping industry needs additional encouraging economic signs, it could take heart from the latest statistics from the American Association of Railroads. For the week ending Feb. 18, the 13 U.S., Canadian and Mexican railways reported total weekly traffic was up 7.6 per cent from the same point in 2016. For the first seven weeks of 2017 traffic was 3.2 per cent above last year. Canadian railroads reported cumulative rail traffic volume was up 7.4 per cent for the period compared to 2016.

The Port of Thunder Bay recorded its busiest December ever loading Canadian grain in domestic and ocean-going vessels. It was a similar situation in the American grain ports as shipments increased by 21 per cent during 2016.

Last year, the seaway opened on March 21 and closed on Dec. 31, a navigation season of 286 days that tied the record first established in 2008 and matched in 2013 for the longest navigation season. Bowles said the opening date is always constrained by the need to perform maintenance and upgrades on seaway facilities during the winter.

While ice coverage on the lakes in late February had dropped below 10 per cent, there was enough snow during the winter in the Great Lakes region to ensure chart datum if not higher water levels during the season.

Bowles said in addition to grain and ore, other bulk commodities including salt as well as liquid bulk shipments should increase this year. Then there’s the possibility that infrastructure spending in Canada and the United States might generate the need for raw materials, cement and steel.

Mike Broad, president of the Shipping Federation of Canada, said traffic on the Seaway-Great Lakes “should be up a bit.” Growing economic activity in the United States should increase the demand for imported steel and there’s plenty of grain to trans- port to overseas customers.

Bruce Burrows, president of the Chamber of Marine Commerce, said, “Obviously, it’s too early to tell how things will fare in 2017 but we’re particularly encouraged by the fact that there is a large carry-over of Prairie grain for potential export.”

The strong improvement during the last quarter of 2016 was due to Canadian ships “back in full service delivering iron ore pellets from U.S. Great Lakes ports to the Port of Quebec for transshipment overseas. The grain program was very strong in November and December.

The post A wave of optimism in advance of seaway opening appeared first on Manitoba Co-operator.

They’re boosting a US$3.8-billion plan which will require at least 10 years of construction, dredging and regulatory harmonization to implement, much of which Washington and Ottawa would have to pay for. They also need to designate an agency with overall responsibility for the functioning of the waterway.

The improvements would double the amount of cargo moving through the St. Lawrence Seaway-Great Lakes system.

Gov. Rick Snyder of Michigan and Premier Kathleen Wynne of Ontario, who released the plan on behalf of the other Great Lakes governors and premiers say the plan will boost the region’s US$5-trillion economy and create jobs on both sides of the border.

The plan drew cautious praise from the shipping industry. It doesn’t fully recognize the importance of the freight moved through the waterway by ocean-going vessels, said Sonia Simard, director of policy and government affairs for the Shipping Federation of Canada, which represents ocean-going fleets that trade in the Great Lakes.

“We believe that the diversity of this traffic and the importance of this trade for the Great Lakes-St. Lawrence River region should be more explicitly acknowledged in the document, considering the geographical scope of this proposed strategy,” she notes.

The need for regulatory harmonization between the U.S. and Canada is essential to improving the efficiency and competitiveness of the seaway-Great Lakes, she pointed out. The current system creates a patchwork of regulatory demands and “results in increased administrative and operational costs,” she adds.

The departments and agencies of both countries should harmonize their processes and share data with respect to certification and inspection, she said.

“One example of such streamlining could be the application of a single clearance process by the Canadian and U.S. authorities of marine shipments transiting the region,” Simard said.

Streamlining of pilotage services and the renewal of icebreaking fleets are also essential.

Glen Nekvasil, vice-president of the U.S. Lake Carriers Association, applauded calls in the plan to create a second lock between lakes Superior and Huron and to dredge the St. Marys River between lakes Huron and Ontario as well as other infrastructure improvements to keep shipping on the lakes safe and efficient. Dredging the St. Marys River to its authorized depth of eight metres creates political controversy over declining water levels. The river is considered a “critical choke point” in the waterway.

The need for a second lock to supplement the existing two locks between Superior and Huron was highlighted last summer during a 19-day closure, Nekvasil said.

Mark Fisher, CEO of the Council of the Great Lakes Region, which represents shipping and other maritime groups, said, “A potential disappointment with this plan is that it didn’t go far enough. Given the importance of the seaway to the regional economy, anything we can do to find solutions to increasing the use and the value of the maritime system is beneficial to everybody.”

Shipping in the Great Lakes-St. Lawrence Seaway supports 227,000 jobs and creates more than US$33 billion in business revenue, says a report commissioned by the Chamber of Maritime Commerce.

Larisa Fenn, spokeswoman for the Port of Hamilton, Ont., said, “We were pleased to see the plan champion the idea of ports as job-creating development nodes, understanding how ports serve as fertile ground for the development of industry clusters.

“We would love to see Ontario preserve space for transportation-intensive industrial development within port zones, ensuring the flexibility to integrate a range of industrial and ancillary services within these zones. This will translate into future prosperity for Ontario by supporting key growth sectors like advanced manufacturing, construction and agri-food.”

Dredging is also needed in many American harbours and rivers, the plan notes. Mike Piskur, a spokesman for the Council of Great Lakes Governors and Premiers, says shipping doesn’t get the attention it should, considering its economic importance to the region, calling it an “underutilized asset.”

“Probably over the last 10-plus years, in state or provincial freight plans, maritime, if it was mentioned at all, it was in passing,” he said.

Attention also has to be paid to the road and rail links to the Great Lakes ports, the plan states.

The post Provincial and state leaders float Great Lakes shipping plan appeared first on Manitoba Co-operator.

Unlike other season openers, no thick ice blocks the Great Lakes and water levels are high enough to make mariners smile.

Economic headwinds, however, threaten to limit the volume of traffic.

Bruce Hodgson, director of market development for the Canadian Seaway Management Corp., said in an interview he’ll be pleased if this season’s final results manage to match the 36.1 million tonnes of freight the seaway carried last year, never mind reaching the 39.9 million tonnes transported in 2014. His expectation is for a slight decrease.

Without significant ice on the lakes as in the past two winters, Hodgson expects ocean-going vessels will enter the seaway-Great Lakes as early as possible to deliver loads and take on grain cargoes.

“That should help us get off to a better start,” he said.

There are still significant grain stocks in Western Canada.

“It will be a challenging year,” he said. “While the economy is struggling, the lower value of the dollar could boost exports.”

Hodgson added the organization would be watching the situation closely, something he admits everyone in the maritime business will be saying this year because of global conditions. Overall it’s a bad news scenario of excess capacity and slack demand, something that can be seen in the moribund Baltic Dry Index that reflects prices for transported bulk commodity cargoes like grain, coal and iron ore. Its peak on May 20, 2008 was 11,793 points, but most recently it’s been anchored below 400, with a March 14 reading of 393 points.

“We don’t expect any iron ore or coal exports out of the system because of slow conditions in China.”

Kirk Jones, the interim president of the Canadian Shipowners Association, expects the year will be a difficult one. What’s he predicting?

“A downturn of biblical proportions,” Jones said. “All of our customers are suffering.”

His members are shedding vessels while the U.S. carriers plan to leave four of their major iron ore carriers tied to the wharf this year.

Michael Broad, president of the Shipping Federation of Canada, said it’s not all doom and gloom.

“The health of the seaway depends on the U.S. economy and it’s fairly strong,” he said. “That should bring in steel shipments although not as strong as last year.”

Export grain is the one commodity that has the potential for a consistent performance, Hodgson said.

The 2015 grain shipments of 10.8 million tonnes were well above their five-year average and marked a return to a more normal harvest after the record Prairie crop in 2013, he said.

“The Port of Thunder Bay, one of the main east-bound shipping points for Prairie grain, had its second-best season in 15 years,” he said.

Leading the traffic decline last year were coal shipments with a 40 per cent tumble to 2.5 million tonnes. Iron ore was the one positive category rising 3.8 per cent to 7.1 million tonnes, as the long-struggling North American steel industry showed signs of life.

In 2015, the U.S. Great Lakes freighters moved 87.2 million tons of cargo, a decrease of three per cent compared to 2014. The iron ore trade was down more than 10 per cent because of record levels of foreign steel being dumped into the U.S. market, says the Lake Carriers Association.

The group noted that legislation recently signed by President Obama promises to rein in tariff evasion and other unfair trade practices, adding restoration of fair trade in steel would be key to the future of Great Lakes shipping.

While comparable Canadian numbers aren’t available, publicly traded Algoma Central noted in its end-of-year earnings report that softer business conditions in the second half of 2015 contributed to revenues in the fourth quarter of just $119 million, compared to $141.6 million in the same period a year earlier.

For the domestic shipping lines, 2016 will be a year of matching its operational capacity with the traffic demand, Jones adds.

“Our fleet is built for boom-year capacity,” he said. “Right now it looks like it could be three or four years before there is a rebound. So the companies will be focusing on cost control and being ready for the upturn.”

The post Seaway shippers say conditions are good, but business is bad appeared first on Manitoba Co-operator.

It’s the first hike in six years, and the St. Lawrence Seaway Management Corporation says the increase will help fund infrastructure renewal, efforts to reduce system costs, and marketing efforts.

A late-season surge in Prairie grain exports last fall pushed up traffic by four per cent to 39 million tonnes, and seaway officials expect another two per cent rise this year.

“The increase in tonnage testifies to both the economic recovery taking place within the seaway’s client base and the emergence of new trade patterns,” said Bruce Hodgson, the corporation’s director of market development.

The season will also see more of the 20 new freighters ordered by Algoma Central, Canada Steamship Lines, and Federal Navigation. They will be more fuel efficient and environmentally friendly than the existing 40-year-old-plus vessels.

The one sour note is that water levels on lakes Superior, Michigan, and Huron and in Montreal are below their all-time average for this time of year.

Russia plans wheat intervention

moscow / reuters / Russia plans to buy wheat on the domestic market in the August-October period to replenish stocks after last year’s drought, a move seen bringing more risks for the country’s exportable surplus.

If the government ends up competing with exporters for grain, it could jeopardize Russia’s traditional role as one of the cheapest suppliers on the world market. The country’s restocking plan would set a bottom price for the new harvest, traders and analysts say.

The government is aiming for a starting price range of US$190 to US$230 per tonne. Analysts say the government could buy about six million tonnes of grain this year, mainly wheat and corn.

Since the start of this season, the government has sold 2.2 million tonnes of grain from its grain stocks, known as its intervention stocks, and plans to sell an additional 2.3 million tonnes by July. This will decrease the stocks to about 300,000 tonnes.

The post Seaway raises tolls after five-year freeze appeared first on Manitoba Co-operator.

A late-season surge in grain exports from Western Canada lifted the seaway traffic to 38.9 million tonnes of cargo for the 2012 season, a haul that bested the Seaway Management Corp’s (SMC) forecast by 300,000 tonnes.

Overall the waterway finished 1.4 million tonnes ahead of 2011’s result of 37.5 million tonnes. And it accomplished that with 4,083 vessel transits, 144 lower than in 2011, a sign that ships are moving more cargo.

“Canadian traffic has rebounded since the low point of 2009. The North American economy is growing at a steady pace and conditions do appear reasonably certain going forward. However, there are so many variables and as always some uncertainty,” Raymond Johnston, president of the Chamber of Marine Commerce, said in an interview.

Most discussions he’s heard about seaway prospects “suggest there’s nothing to be pessimistic about at this time,” he said. Iron ore and coal should continue flowing to China as they did last year. There’s still plenty of Canadian grain left from the 2012 harvest.

President Obama’s State of the Union address comments about a revved up American infrastructure program and talk of a renewed infrastructure building plan in Canada could translate into more cargo moving on the lakes.

Mike Broad, president of the Shipping Federation of Canada, says reports that the U.S. economy is picking up steam make him think there could be a modest improvement in tonnage. That could include more steel imports. The biggest uncertainty is grain exports from both Canada and the United States because of ongoing worries about a repeat of last summer’s drought.

Glen Nekvasil, vice-president of the U.S. Lake Carriers Association, notes that his members are still struggling from a drop in cargo last year.

However, the No. 1 issue this year will be the water levels. “We have lost four feet of draft in lakes Huron and Michigan and the St. Mary’s River and that means our ships have to carry 18 per cent less cargo to enter most Great Lakes ports.”

In its January report, the Canadian Hydrographic Service says water levels on the lower lakes and in Montreal are below their all-time average for this time of year although still above the level of Chart Datum. Lake Superior and Lake Michigan-Huron are below their all-time average for this time of year and are below the level of Chart Datum.

The service said shipping lines have to be especially cautious in high winds during low water periods “when water levels can rise or fall significantly in a short period of time.”

Meanwhile, about eight per cent of the Great Lakes were ice covered in late February, which is below the average of 12 per cent since 1980, but above last year, when only five per cent of the lakes were ice covered, the Canadian Ice Service reports.

Meanwhile, the International Joint Commission says the organization hasn’t decided yet whether to recommend remedial measures to Ottawa and Washington to reverse falling water levels on the Great Lakes. It has to report on the findings of its Upper Great Lakes study board, which examined the water level issue during 2012.

The post Seaway opening on an upbeat note appeared first on Manitoba Co-operator.

The seaway handled 38.9 million tonnes of cargo for the season, which began in mid-March and ran to Dec. 3. Mild winter weather meant it could have easily stayed open into January.

In addition to increased shipments of Canadian grain, demand for low-sulphur coal from Europe and iron ore from China boosted business, although this was partially offset by reduced U.S. grain shipments, which were impacted by the drought.

The seaway could stay open longer if interest from shippers and marine carriers is sufficient to justify the added costs, said the head of the Canadian Seaway Management Corp.

“If it makes commercial sense and if there is enough cargo, we would be open to that,” said Terence Bowles. “Until now there has not been a great demand for it.”

The seaway has upgraded its locks and related facilities with bubblers and gate heaters so they could operate in cold weather, he noted. As well, the St. Lawrence River has been opened to year-round navigation. Until the last few years, the seaway usually shut down before Christmas and opened in late March. The opening has been pushed ahead to mid-March and this year it will keep its gates open until the new year.

Extending the shipping season into January and opening earlier in March would be done in incremental steps, Bowles said.

“Not only does there have to be the business, it also has to be environmentally acceptable.”

In the long run, the seaway could try to match the closing of the Soo Locks from Jan. 15 to March 15, he said.

The post Strong finish prompts thoughts of longer seaway season appeared first on Manitoba Co-operator.

Coal from Montana is expected to be a bright spot, but increased grain movement is expected following a $30-million investment by Parrish and Heimbecker in its grain-handling facility at Hamilton, the St. Lawrence Seaway Management Corporation said in a news release.

Canadian and international carriers are also in the process of building new vessels, with some scheduled to begin service on the seaway this year.

La Niña moves on

sydney / reuters

A weather pattern blamed for heavy rains and crop destruction in the Asia-Pacific region over the past two years has run its course slightly ahead of schedule, forecasters in Australia said March 27.

The Australian Bureau of Meteorology said climate models indicate the weather phenomenon known as La Niña, the girl child, has come to an end, after earlier this month predicting it would drag on for a further month or two.

Sea surface temperatures across the central tropical Pacific Ocean were now at neutral levels, according to the bureau.

The post Seaway opens, expects strong year appeared first on Manitoba Co-operator.

However, everyone tempers their forecasts with a caution about the prospect for Canadian and American grain exports. While there’s plenty of grain in North America, there’s also more grain supplies around the world. And what will happen to Canadian grain exports after the CWB’s monopoly ends this summer?

The seaway handled 37.5 million tonnes of freight in 2011, up a respectable 2.5 per cent from 2010, but the coming year is difficult to predict, said Mike Broad, president of the Shipping Federation of Canada.

“From what I hear, the first half of the year will be like last year,” said Broad, before adding it’s hard to say what might happen next.

The head of the Chamber of Marine Commerce is more positive.

“By all accounts, things look up — shipments could be up by five per cent,” said Raymond Johnston. “The United States economy has looked better lately with manufacturing rates on an upswing.”

One positive sign is that ocean freight rates are down and shipping lines are looking for business. If the U.S. economy picks up more momentum, especially on the export side, then ship owners will be looking for business.

A survey of economic forecasts for 2012 underscores the cautious optimism.

Both the Conference Board of Canada and Bank of Canada have reduced their growth projections for 2012, with both estimating it will be around two per cent.

The post Seaway set to open but seasonal outlook uncertain appeared first on Manitoba Co-operator.

Little noticed and seldom mentioned in the media, marine shipping through the St. Lawrence Seaway and Great Lakes plays a major role in the economies of Ontario, Quebec, and eight American states.

The sector generates $34.6 billion of economic activity annually and close to 227,000 jobs in the two countries, according to a new study funded by the Canadian and American seaway authorities.

That s something government and business leaders should know, said Terry Johnson, administrator of the U.S. Seaway Development Corp.

We plan to start briefing and talking about the impact shipping on the Great Lakes has on everyone in the region, said Johnson.

The efficient movement of cargoes ranging from grain, iron ore, and steel products to heavy-lift specialty items such as wind energy turbines, enables our industries to effectively compete in a global marketplace, added Terence Bowles, president and CEO of the Canadian Seaway Management Corp.

People don t realize this, so we have to tell them how what we do affects peoples jobs and livelihoods. We have an impact on peoples lives.

But seaway shipping is under threat because of a proposal by New York s state government that would require freighters to have ballast sterilization equipment that s 100 times more effective than the international standard.

The problem, according to shipping lines, is that such equipment doesn t exist and isn t even in development. But since two of the seaway s 15 locks are in New York, the new rules if enacted could effectively shut down the seaway, and leave grain, iron ore, and other commodities stranded.

Johnson said his organization has presented the study s results to New York Gov. Andrew Cuomo in hopes the proposed law, introduced by a previous governor, will be reversed.

Despite the ballast law threat, this year has been a turnaround one for the waterway.

While still a long way from operating at full potential, seaway traffic has climbed in 2011 despite a sputtering North American economy. The first of a flotilla of new ships designed for Seaway- Great Lakes cargo service arrived this year and ports bustled with economic development. And what at first looked like a poor year for grain shipping improved dramatically when crops on the Prairies improved. Grain shipping will now continue until the seaway closes in December.

But the future is uncertain, said Bowles.

The outlook is for slow economic growth in the immediate future, he said.

One positive move would be the successful conclusion of the Canada-European Union free trade talks, he said. More trade agreements with Latin American countries, like the one recently concluded with Colombia, would also buoy the prospects for the waterway.

———

People don t realize this, so we have to tell them how what we do affects peoples jobs and livelihoods. We have an impact on peoples lives.

TERENCE BOWLES

PRESIDENT AND CEO OF THE CANADIAN SEAWAY MANAGEMENT CORP.

The post Seaway Enjoys Good Year But Faces Uncertain Future appeared first on Manitoba Co-operator.

It wanted to start the 2011 navigation season with a splash so it picked March 22, an earlier- than-usual opening.

Then Finance Minister Jim Flaherty selected March 22 for his 2011 budget. As a possible trigger to a federal election, the budget will dominate the news that day. The seaway opening might get mentioned in passing.

Still the seaway and its supporters are feeling upbeat, partly because of better economic prospects.

But also Canadian shipowners have delivered a $1-billion-plus vote of confidence in its future in the new form of nine new freighters to work the system. Then in a surprise move, Algoma Central coughed up $85 million to buy the marine assets of the Upper Lakes Group.

Ray Johnston, president of the Chamber of Maritime Commerce, says the economic outlook has just about everyone in the marine sector feeling cautiously optimistic about the seaway’s prospects for 2011 and beyond.

DEMAND FOR STEEL

The demand for steel is strong enough to require plenty of loads of iron ore and coal while the high international grain prices and ongoing Russian wheat export ban should continue to pull a lot of American grain out through the waterway.

The case for the seaway could become even stronger this year when Canada and the United States release a report on the importance of Great Lakes transportation to the North American economy.

Beyond the strength of the American economic recovery, the biggest uncertainty hanging over the system may be New York’s stance on ballast water treatment. Wisconsin and California have moved to accept IMO standards while New York has merely delayed into 2013 the implementation of its rule requiring standards higher than current technology can accomplish. “New York’s action just perpetuates the uncertainty,” Johnston says.

Terry Johnson, administrator of the U.S. Seaway Development Corp. is in the cautiously optimistic camp when it comes to 2011 traffic levels.

UPGRADED ASSETS

Everywhere he looks he sees signs of companies and ports upgrading assets and he hopes Congress will continue to support efforts on the American side.

He also credits the Seaway Management Corp. for its toll rebates of up to 20 per cent for new cargoes or volume shipments because they bring new business and ships to the Great Lakes.

He lauds the Canadian government for rescinding the 25 per cent duty on imported ships which has paved the way for CSL and Algoma Central to invest in new ships. He said Algoma Central’s takeover of ULG sends a concrete message of confidence in the seaway’s future.

Terrence Bowles, who will be attending his first seaway opening as president and CEO of the Seaway Management Corp., said in an interview he’s hoping to see the waterway handle 39 million tonnes of cargo compared to the 36 million tonnes of 2010. “We hope to come in close to our pre-recession levels.” He certainly wouldn’t object to hitting 40 million tonnes.

MORE TRAFFIC

In addition to the prospect of new ships, he’s encouraged by developments on the Great Lakes ports that should entice more marine traffic and make what’s already there move more efficiently. He’s also buoyed by the development of the Melford container terminal in Nova Scotia, which could help move the Great Lakes into the container leagues.

Tom Brodeur, CSL’s vice-president of marketing and customer service, has a cautiously optimistic prediction for 2011. “On paper it looks good. Last year wasn’t a bad year. This year should be better.”

The best news for the seaway “is the customers are investing in new capacity,” he continues. The new vessels already announced for the lakes “aren’t the end of the good news. The higher value of the loonie, the duty removal and under-used capacity in foreign shipyards all contributed to the decisions.”

Last year, CSL announced the acquisition of seven new ships, which includes two ships that will be dedicated to Great Lakes trading. Work begins on them in April and the ships are expected to be in operation by next year, Brodeur said. They will join the company’s eight bulkers and 10 self-unloaders.

The post Optimistic Outlook For Seaway appeared first on Manitoba Co-operator.