The 2,340-mile St. Lawrence, which opened to deep draft ships in 1959, has had its share of ups and downs. After an 8.9 percent tonnage spike two years ago, 2007 was trailing 2006 by 11.3 percent. Between 1989-91, tonnage declined and revenue stagnated and by 1992 was falling, sparking talk of closing the Seaway entirely. And some question whether the U.S. should hold up its end given that much of it is in Canada.
So Seaway management, in 2004, comprised of both U.S. and Canadian non-profit agencies, went on the offensive with a marketing campaign known as the H2O Highway. The campaign extols the cost benefits of using the Seaway over trucks and rail. Waterborne shipping is the most “benign” to the environment, the website says. They trumpet their trade missions to economic hotspots such as Brazil and China, nations that are attracted by the 110 million mega-market in the Seaway’s adjoining states and provinces.
That the Seaway could double its traffic capacity is good and bad news. On one hand, the Seaway could grow. On the other, it’s an expensive asset — the Seaway has 574 full-time employees — that’s only half-used. Container and cruise ships, which can top 800 to 1,000 ft in length, are too large to fit through the locks so bulk carriers are the name of the game. The longest vessel that can pass through the Seaway is 740 ft.
On a good day, 12 to 14 ships pass through the Welland Canal locks, meaning half the potential toll revenue is left on the table (for instance, a grain ship is charged $0.6634 per metric ton to get through the Welland locks). For the fiscal year ending March 31, 2007, Seaway posted $85.2 million in operating revenues against $100.6 million in operating expenses and since 1998, revenues have always fallen short of plan although sometimes by a small margin. Through Nov. 30, 2007, coal, grain, other bulk and general cargo tonnage had fallen sharply. Only iron ore grew.
A 128-page study conducted by seven U.S. and Canadian government agencies concluded the Seaway is a tricky balancing act among “economic, environment and engineering (maintenance and expansion)” considerations. “Only if a balance is struck among these three differing sets of imperatives will it be possible to maintain truly sustainable commercial navigation in the Great Lakes basin and the St. Lawrence River,” the report concluded.
Key Seaway Study Observations
• The ecological impact of the Seaway must still be lessened.
• Reliability is key given the huge costs of unexpected shutdowns.
• Stronger focus on short sea shipping would better integrate the
Seaway with roads and rails.
• Greater use would alleviate congestion on the roads and rails.