High fuel prices could be good news for the Great LakesWritten by Don Lee | | email@example.com
Higher fuel prices might mean good news for the Great Lakes and the port of Toledo, according to the head of the Toledo-Lucas County Port Authority.
That’s because the cost of transportation makes it more expensive to “outsource” labor and production, meaning more of that stays local and the industries that support it — such as Lakes transportation — feed on that, writes Port Authority President and CEO Paul Toth in the fall issue of SeawayCompass, the St. Lawrence Seaway Development Corp.’s newsletter.
Cheap fuel in the 1980s and 1990s meant the cost of transporting raw materials offshore and finished goods back to the U.S. was “practically overlooked as a cost of doing business,” Toth wrote, but that’s not the case now..
“Most would agree that $100-plus (a barrel) oil is our new normal,” he wrote, noting that transportation costs now represent 72 percent of the “total cost of the supply chain” and transportation efficiency, not real estate development, is a major influence on where a company chooses to expand.
Companies now seek “optimal locations that will ultimately keep the cost of transportation at the lowest cost possible” and avoid “locations that create bottlenecks … due to the congestion of the transportation system.”
The Great Lakes region’s location and the variety of transportation available put the region in a position to take advantage of this, he wrote.
Cargo tonnage up
That’s paying off, with seaport tonnage at the Port of Toledo up 16 percent through September over the same period last year, according to a press release from the American Great Lakes Ports Association.
That increase puts the year-to-date tonnage for the port almost 1 million tons ahead of last year, the release stated.
General cargo was up 54 percent, mostly because of increased cargo “throughput” — arrival by ship and departure by other means of transportation — at the Midwest Terminals overseas port, the release stated. Cargos due include steel coil, wire rod, pig iron, calcium, project cargo — such as the industrial reactor vessels that arrived by tug and barge and were trucked to one of the oil refineries in Oregon — and salt. That last is due to an increased demand for road salt in anticipation of winter needs, which has placed a heavy demand (and resulting higher prices) on salt from traditional sources, the salt mines in Cleveland and in Goderich, Ontario, according to various news reports.
In addition to overseas traffic, the Toledo port has seen an increase in Great Lakes trade, with 35 more U.S.- and Canadian-flagged lake freighters through September, compared to the same period last year, the Ports Association said.
“Lakers” typically carry bulk cargoes such as coal, iron ore, grain and, in the case of a couple specially adapted ships and barges, cement.
That increased traffic includes some of the six new China-built lakers which have entered service since 2012, including two of Canada Steamship Lines new Trillium-class vessels.
One of those, the Baie Comeau, departed Toledo on Oct. 22 after arriving last weekend at The Anderson’s dock to receive grain.
Baie Comeau’s sister ship, Whitefish Bay, has visited Anderson’s dock at least twice.
Another Canadian fleet, Algoma, has one China-built laker in service with another coming on-line and more being built.
The ending of a tariff on overseas-built ships made it cheaper for Canadian fleets to seek shipbuilding contracts overseas.
Great Lakes history
Several presentations are scheduled in the near future on shipwrecks and other historic aspects of Great Lakes shipping.
- Paul LaMarre, director of the Port of Monroe, Michigan, will speak Nov. 12 about the “Great Storm of 1913” at the National Museum of the Great Lakes, 1701 Front St., Toledo. The 1913 storm remains one of the single biggest losses of lives on the lakes, claiming 21 vessels and 230 lives. The museum ship, Col. James M. Schoonmaker, docked next to the museum was one of the ships that survived the storm.
- Georgeann and Mike Wachter will talk Oct. 28 about “Lake Erie’s Perfect Storm,” the storm of Oct. 26, 1916. Their talk is set for 1 p.m. Oct. 28 at the Cedar Point Center on the Bowling Green State University Firelands campus in Huron. The Wachters are both experienced wreck divers and their talk will include a display of shipwreck artifacts.
- Dennis Hale, sole survivor of the 1966 wreck of the freighter Daniel J. Morrell, will talk about the tragedy at 1 p.m. Nov. 20, also at the Cedar Point Center at BGSU Firelands. The sinking of the Morrell on Lake Huron claimed 28 of the freighter’s 29 crew.