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2 The St. Lawrence Seaway The Great Lakes St. Lawrence Seaway (GLSLS) system is a bina- tional waterway operated jointly by the United States and Canada. Encompassing the St. Lawrence River and the ï¬ve major Laurentian Great Lakes (Ontario, Erie, Huron, Michigan, and Superior), the inland waters that make up the GLSLS system stretch westward over 2,300 miles (3,700 km) from Anticosti Island in the Gulf of St. Lawrence to the western shore of Lake Superior (see Figure 2-1). The St. Lawrence Seaway proper, within the meaning of the leg- islation providing for its construction and maintenance, extends from Montreal to Lake Erie and is made up of two sections: â¢ The MontrealâLake Ontario (MLO) section, located partially in Canadian waters and partially in international boundary waters, includes a series of seven locks (ï¬ve Canadian, two U.S.) and connects Montreal, Quebec, and Lake Ontario. It enables ships to navigate the 190 miles (304 km) between the lower St. Lawrence River [elevation 20 feet (6 m)] and Lake Ontario [elevation 243 feet (75 m)]. â¢ The Welland Canal, located in Canadian waters, includes a series of eight locks (all Canadian) and connects Lake Ontario and Lake Erie [elevation 569 feet (175 m)], a distance of 36 miles (58 km). The MLO section, which opened in 1959, was the last link to be completed in the series of channels and canals allowing deep- draft vessels to move between the Atlantic Ocean and ports on the Great Lakes. To provide context for the committeeâs identiï¬cation and explo- ration of options for the Great Lakes region, this chapter gives a 17
FIGURE 2-1 GLSLS system. (SOURCE: St. Lawrence Seaway Development Corporation.)
The St. Lawrence Seaway 19 short historical overview of the St. Lawrence Seaway, from early efforts to develop a transportation route and trade corridor along the St. Lawrence River into the Great Lakes to the culmination of these efforts in the 1959 opening of the modern seaway. A sum- mary of the waterwayâs management, operations, and financing includes brief comments on the roles and perspectives of the seawayâs Canadian and U.S. partners. The infrastructure of the seaway itself and of associated ports and industrial facilities is then discussed. The section on seaway trafï¬c comments on historical trends, notes the difï¬culties encountered in forecasting future traf- ï¬c levels, and seeks to put the seaway in the broader context of the Great Lakes transportation system as a whole by identifying alter- native (competing) routes and modes for international commerce. The chapter concludes with a brief discussion of two areasâglobal climate and world maritime tradeâwhere anticipated changes could well affect the numbers and types of vessels using the seaway in the future. HISTORICAL OVERVIEW The Great Lakes have provided a means of transporting people and goods since humans ï¬rst settled in the Great Lakes basin. The lakes and tributaries provided transportation by canoe for the native peoples, and trade among groups ï¬ourished. European settlement in North America during the 16th and 17th centuries was accom- panied by efforts to develop a travel route and trade corridor along the St. Lawrence River and into the Great Lakes, and a trading post was established at Duluth at the head of Lake Superior as early as 1679. During the 18th and early 19th centuries, the St. Lawrence River was the principal inland route for people, supplies, arms, and com- mercial goods, even though major shipping could travel no further west than Montreal. Despite the need to portage past obstacles such as the Lachine Rapids and Niagara Falls, the river was far easier to travel than rugged inland routes. Over time, various rapids were
20 Great Lakes Shipping, Trade, and Aquatic Invasive Species bypassed by channeling or dredging, and by the middle of the 19th century a continuous water routeâincluding the ï¬rst Welland Canalâlinked Lake Erie to the Atlantic Ocean. The waterway was rudimentary, however, and its depth and lock dimensions pre- cluded the shipment of heavy bulk cargoes aboard large vessels. The system closed frequently because of bad weather and was generally inoperable for 5 months over the winter. The railroads began to expand into the Great Lakes basin during the 1840s, providing an alternative means of transporting large amounts of freight year-round between the Atlantic Ocean and the continental interior; by the 1850s the Erie Canal was losing much of its traf- fic to the railroads. During the second half of the 19th century, rapid industrial ex- pansion and population growth in the continental interior resulted in greatly increased requirements to move goods, notably wheat and iron ore. Construction of the transcontinental Canadian Paciï¬c Railway in the 1880s opened up the possibility of transporting grain by rail from the prairies to Port Arthur (now part of Thunder Bay) for shipment down the Great Lakes. Also during this period, mod- ernization of the St. Lawrence waterway continued through a variety of lock and canal construction projects, and in 1895 the governments of the United States and Canada appointed a Deep Waterways Commission to study the feasibility of a seaway. The commis- sion reported in favor of the project (U.S. Congress 1897), and its report was followed in 1905 by the establishment of the Inter- national Waterways Commission, created to advise the govern- ments of both countries about water levels and ï¬ows in the Great Lakes, especially in relation to the generation of electricity by hydro- power. The Boundary Waters Treaty between the United States and Canada was signed in 1909 and provided for the creation of the International Joint Commission (IJC),1 which conducted a series of engineering studies and proposed the construction of the 1 IJC has the authority to resolve disputes over the use of water resources that cross the international boundary. The commission is currently responsible for the regulation of the water level in Lake Ontario, which governs the ï¬ow of water in the St. Lawrence River.
The St. Lawrence Seaway 21 St. Lawrence Seaway. However, two world wars and strong oppo- sition from the railroads and other industrial interests prevented the start of any joint seaway construction projects to allow ocean vessels to enter the Great Lakes for another 45 years. Finally, in the early 1950s, the pressing needs for both power gen- eration and improved navigation led to the creation of the seaway.2 In 1951, the Canadian Parliament approved legislation authorizing construction of a Canadian Seaway and associated hydroelectric power generation facilities. The proposed dams in the Interna- tional Rapids section of the St. Lawrence River would not only create a navigation pool upstream of the dams to allow sufficient draft for shipping but also offer the opportunity to generate more than 12 billion kilowatt-hours of electricity annually. In 1954, the U.S. Congress passed the WileyâDondero Seaway Act authorizing the U.S. government to work jointly with the government of Canada to create a deepwater navigation channel in the St. Lawrence River between Montreal and Ogdensburg, New York, and associated hydroelectric generation facilities. Construction work commenced later that year. The MosesâSaunders hydroelectric generating station commenced operations in 1958, and the seaway was offi- cially opened for navigation by Queen Elizabeth II and President Eisenhower on June 26, 1959. MANAGEMENT, OPERATIONS, AND FINANCING Canadian and U.S. legislation authorizing construction of the sea- way also created organizations to manage and operate the waterway, namely, the Canadian St. Lawrence Seaway Authority (SLSA) and the U.S. St. Lawrence Seaway Development Corporation (SLSDC). Both organizations have undergone changes in the years since their 2 Signiï¬cant changes in elevation in various sections make the St. Lawrence River ideal for electric power generation. The ï¬rst hydroelectric power generation facilities were built by private ï¬rms in the late 1800s. In contrast to the power generation facilities associated with the current seaway, these were modest projects that used only a small fraction of the water ï¬ow.
22 Great Lakes Shipping, Trade, and Aquatic Invasive Species creation. SLSDC is now an operating administration of the U.S. Department of Transportation, subject to the policy direction and supervision of the Secretary of Transportation, and since 1986 has been an appropriated rather than a self-financing agency. On the Canadian side, the 1998 Canada Marine Act replaced SLSA by a private, not-for-proï¬t entity, the St. Lawrence Seaway Manage- ment Corporation (SLSMC), which operates and maintains the Canadian Seaway infrastructure, while the Canadian government retains ownership of the infrastructure and acts as regulator. The Canadian and U.S. seaway corporations jointly operate and maintain the GLSLS system3 and provide trafï¬c control assistance to vessels using the waterway. The two organizations also undertake trade development functions aimed at enhancing use of the GLSLS system, which is increasingly referred to in promotional literature as Highway/Autoroute H2O. The total cost of the St. Lawrence Seaway navigation project was US$470.3 million, of which Canada paid $336.5 million (72 percent) and the United States $133.8 million (28 percent). When the sea- way opened in 1959, a system of tolls based on estimates of future trafï¬c was established by agreement between the two countries. The purpose of the system was to obtain directly from users the revenues required to cover the costs of operation and maintenance, as well as interest on loans and repayment of capital over a 50-year period (Ghonima 1984). This objective was not met, and the op- erating deï¬cit for the system escalated rapidly during the 1970s, despite some of the highest trafï¬c volumes in the seawayâs history. A revised toll system, agreed on by the two governments in 1978, allowed for the phase-in of higher tolls, and further revisions were implemented during the early 1980s. Tolls were eliminated on the U.S. portion of the seaway in 1986 when the U.S. Congress created the Harbor Maintenance Tax 3 The U.S. Army Corps of Engineers (USACE) is involved in maintenance of the GLSLS system through its broad responsibilities for inland waterway transportation in the United States. USACE facilitates the movement of vessels by activities such as deepening, widening, and straightening navigation channels, and it evaluates, plans, and constructs improvements to inland harbors and channels.
The St. Lawrence Seaway 23 (HMT) to generate revenue for operation and maintenance of the nationâs navigation infrastructure. The HMT is an ad valorem (value) tax assessed on cargo moved by ship between U.S. ports and to U.S. ports from overseas, and it is paid by the owner of the cargo. HMT receipts are placed in the Harbor Maintenance Trust Fund. Expenditures from this fund are determined by the con- gressional budget and appropriations process and include annual appropriations to SLSDC that are used to meet operation and maintenance expenses for the seaway.4 Canada continues to charge seaway tolls, which are a major source of revenue for SLSMC. For the period April 1, 2006, through March 31, 2007, the corporationâs total revenue was C$85.2 million, of which C$80.3 million (94 percent) was from seaway tolls. The current toll structure is a composite charge that depends on cargo tonnage and type, as well as on the vesselâs gross registered tonnage. For vessels using the Welland Canal, there is also a lockage charge for each lock transited. Cargo tolls are generally higher for higher- value commodities. Thus, for the 2007 navigation season, the tolls per metric ton (tonne) for coal and grain were approximately C$0.6, while those for general cargo and steel slab were C$2.4 and C$2.2, respectively. While the seaway is managed and operated jointly by Canada and the United States, there are important differences between the two partners in terms of the seawayâs geography and financing. As already noted, Canada had a greater ï¬nancial stake in the origi- nal navigation project, paying 72 percent of the total cost. In addi- tion, 13 of the 15 seaway locks are operated by the Canadian SLSMC and two by the U.S. SLSDC. As a result, Canada makes a much larger financial contribution than does the United States to seaway operations. In 2006, SLSMCâs operating expenses were C$63.7 million, while those of SLSDC were US$19.3 million. Furthermore, while the GLSLS system serves both the United 4 Proposals in the Bush administrationâs FY 2006 and FY 2007 budgets to reinstate tolls on the U.S. portion of the seaway met strong opposition from Great Lakes ports and many others in the regionâs maritime industry.
24 Great Lakes Shipping, Trade, and Aquatic Invasive Species States and Canada, the St. Lawrence Seaway itself, comprising the MLO section and the Welland Canal, is used primarily by foreign- and Canadian-ï¬agged vessels. The majority of the U.S.-ï¬agged vessels operating on the GLSLS system are too large to transit the Welland Canal, and their operations are limited to the upper Great Lakes (see Chapter 4). INFRASTRUCTURE Navigation System The seaway channels and canals were built throughout to a project depth below chart datum5 of 27 feet (8.2 m), and the locks were built to a usable length of 766 feet (233.5 m) and a width of 80 feet (24.4 m). Thus, after the completion of the MLO section in 1959, vessels capable of carrying 25,000 tons or more of cargo were able to enter the Great Lakes for the ï¬rst time.6 Over the past 15 years, technological developments and more sophisticated modeling tech- niques have led to increases in allowable vessel draft and length, thereby enabling vessels to carry more cargo (possibly up to 30,000 tons per voyage).7 Today, the seaway locks can accommodate ves- sels up to 740 feet (225.5 m) long and up to 78 feet (23.8 m) wide and loaded to a draft not exceeding 26 feet 6 inches (8.2 m). Maintenance of the seaway infrastructure, including system improvements, is conducted during the annual winter closure between December and March. SLSMCâs annual asset renewal expenses, which represent the cost of maintenance and major re- pairs of locks, canal bridges, buildings, and other infrastructure 5 The chart datum is the level of water from which charted depths displayed on nautical charts are measured. 6 Construction of the current Welland Canal started in 1913 but was interrupted by World War I. When the current canal opened in 1932, it allowed for the passage of vessels larger than those ex- isting on the Great Lakes at the time. 7 See, for example, Transport Canada 2001.
The St. Lawrence Seaway 25 assets, have increased steadily from C$16.9 million for 1998â1999 to C$35.5 million for 2006â2007. The Canadian government has been providing general Canadian Treasury funds to SLSMC for its capital improvement projects and has more than doubled SLSMC capital and maintenance funding over the past few years (SLSDC n.d.). SLSDCâs annual operating expenses for maintenance and engineering have been relatively constant over the past 10 years, averaging approximately US$3.6 million.8 SLSDC has developed a 10-year U.S. Seaway Asset Renewal Program Capital Invest- ment Plan for its navigation infrastructure and facilities, and proj- ect and equipment costs are estimated at US$86 million for the period FY 2009âFY 2013 (SLSDC n.d.). As the seaway system ages, planning for future operation, mainte- nance, repair, and rehabilitation is becoming increasingly important. The MLO section is almost 50 years old, and the eight locks of the Welland Canal date from 1932.9 Thus, in 2003, the governments of Canada and the United States initiated a joint study to evaluate the infrastructure needs of the GLSLS system, including the St. Lawrence Seaway proper and the Soo Locks, which allow transit of vessels between Lake Superior and Lake Huron. The GLSLS study, pub- lished in late 2007 (Transport Canada et al.) assessed the ongoing maintenance and long-term capital requirements needed through 2050 to ensure the continuing reliability of the system. The study report does not give a âbottom lineâ cost estimate, but the infor- mation provided indicates that structural maintenance costs for the MLO section, the Welland Canal, and the Soo Locks over the next four decades could exceed US$2 billion (in 2007 nominal dollars). 8 Data on asset renewal and maintenance and engineering expenses are taken from the Annual Reports of SLSMC and SLSDC, which are available on the GLSLS system website (www. greatlakes-seaway.com/). The two seaway corporations use different budget categories to report their various expenses, so the data cited should be interpreted as indicative of the rela- tive contributions of the Canadian SLSMC and the U.S. SLSDC to maintenance and renewal of the seaway infrastructure rather than as rigorous comparisons. 9 A 7-year program to rehabilitate the Welland Canal, funded by the Canadian federal government, was undertaken in the late 1980s and early 1990s.
26 Great Lakes Shipping, Trade, and Aquatic Invasive Species Ports and Industrial Facilities In addition to the infrastructure of the seaway itself, port facilities and a network of industrial capacity, including land-based trans- portation services, have grown up around the GLSLS system. As noted in a recent report, these facilities embody signiï¬cant capital investment by industry, Great Lakes states and provinces, and the Canadian and U.S. federal governments (Cangelosi and Mays 2006). Port facilities may be large and generalized to a range of cargoes or small and specialized to a speciï¬c cargo, or even a speciï¬c carrier. Those with nearby manufacturing facilities may have major rail connections to move semiï¬nished or ï¬nished products to the next point on the supply chain. Some ports in the GLSLS system specialize in transshipmentâ the transfer of goods from one vessel to another or to another mode of transportationâand are equipped accordingly. For example, transshipment elevators that handle both Canadian and U.S. grain exports are situated along the St. Lawrence River in Montreal, Sorel, Quebec City, Trois Rivieres, Baie Comeau, and Port Cartier. These elevators are capable of receiving, storing, and loading all types of export grain, and even of transferring parcels between one ship and another. Import and export cargoes also move by road or rail between transshipment ports on the St. Lawrence River and inland destinations. For example, the Port of Montreal, which has extensive rail links to destinations throughout North America, is a major center for transshipment of containerized cargo between ocean vessels and rail. Transshipment does not necessarily require specialized port facilities, however. The self-unloading ship was developed and per- fected by the domestic Great Lakes shipping industry as a means of delivering bulk cargoes to clients with little or no infrastructure for receiving or handling ships. Conveyors serviced by hoppers under each cargo compartment transfer the cargo to an additional conveyor on a long boom, thus allowing these highly maneuver- able ships to place an entire cargo, or parcels of cargo, in one loca- tion without the assistance of stevedores or shore equipment.
The St. Lawrence Seaway 27 TRAFFIC Historical Trends Trafï¬c data collected by the seaway corporations show that the amount of cargo shipped through the seaway each year has varied considerably since the waterway opened to deep-draft vessels in 1959 (Figure 2-2). For this report, the focus is on vessels transiting the seaway that may be carrying aquatic invasive species (AIS) into the Great Lakes. Thus, the trafï¬c data of particular interest are those for the MLO section, which capture information on all vessels passing through the geographic pinch point at the entrance to the seaway. (The different categories of vessel transiting the seaway are discussed in Chapter 4.) The cargo tonnage moving through the Welland Canal is generally higher than that moving through the MLO section, as Figure 2-2 illustrates, because of the large amount of interlake trafï¬c carrying relatively low-value bulk commodities (see Chapter 4). Traffic on the seaway grew rapidly in its first 7 years and con- tinued to grow, with some fluctuations, until the late 1970s. This 20-year period of growth was followed by an overall downward trend ending in 1993, when traffic levels were the lowest since 1963. A number of factors caused this decline, including a pro- longed economic recession affecting the U.S. steel, automotive, and related industries in the Great Lakes region; reduced demand for grain from traditional markets in Western Europe, notably the former Soviet Union; and increased movement of Canadian grain by rail to developing west coast ports serving the growing Asian market. Between 1994 and 2000, seaway traffic saw a modest re- covery, largely as a result of a surge in steel traffic reflecting the overall strength of the U.S. economy. In recent years, traffic vol- umes have continued to ï¬uctuate as a result of varying charter rates for ocean vessels, restructuring in the steel industry, and slowing industrial production in the Great Lakes region.10 10 A detailed analysis of trends in seaway trafï¬c from 1959 to 2001 has been conducted by TAF Con- sultants (2002).
70 60 50 40 MLO Welland Cargo (Mt) 30 20 10 0 59 961 963 965 967 969 971 973 975 977 979 981 983 985 987 989 991 993 995 997 999 001 003 005 19 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 Year FIGURE 2-2 Seaway trafï¬c, 1959â2006. (SOURCE: St. Lawrence Seaway Trafï¬c Reports, available at www.greatlakes-seaway.com/.)
The St. Lawrence Seaway 29 The availability of both inbound and outbound cargoes is also an important factor affecting current levels of seaway trafï¬c. In the early days of the seaway, it was not unusual for vessels with no cargo on board to enter the GLSLS system destined for ports on Lake Superior, where they would load export cargoes of grain. Since the early 1990s, however, requirements for commercial via- bility have dictated that vessels using the GLSLS system carry cargo on both inbound and outbound voyages (Jenkins 2007). To this end, vessel owners and operators have sought to exploit the com- plementary nature of the seaway steel and grain trades, notably in the case of transoceanic vessels trading with countries outside of North America (see Chapter 4). Taylor and Roach (2007, 5) note that âthe front haul movement of steel and other products into the Great Lakes may be a key determinant of how much out- bound grain moves by [transoceanic] vessels, since these vessels present an opportunity for an attractively priced backhaul move- ment of grain.â Forecasts Taylor and Roach (2005) offer a brief review of long-run trafï¬c forecasts for the St. Lawrence Seaway. Four studies are cited that made forecasts for trafï¬c on the MLO section for 2000. On average, the forecast tonnage was found to be more than twice the actual tonnage, with individual forecasts ranging from 1.8 to 2.8 times the actual values. Thus, these forecasts have missed their mark by a wide margin. An additional study forecast 2010 tonnage on the MLO section of the seaway at 130 million tonnes (Mt), a level that appears unlikely to be achieved, given that it is about 4 times the average trafï¬c for the most recent 5-year period. Taylor and Roach do not identify the reasons behind the overly optimistic trafï¬c fore- casts other than to note the possible inï¬uence of high seaway traf- ï¬c volumes in the mid-to-late 1970s and errors in forecasting grain tonnages on the MLO section of the seaway. The observation that past efforts to forecast future commerce via the St. Lawrence Seaway have fallen short is not surprising.
30 Great Lakes Shipping, Trade, and Aquatic Invasive Species Accurate long-run forecasts of international trade patterns are extremely difficult to establish despite the best efforts of econo- mists, geographers, demographers, and other social scientists armed with a variety of mathematical and statistical tools. History shows that the comparative advantage of a trading region and its transportation links to international markets are affected by a mul- titude of dynamic economic and political forces, which do not often lend themselves to numerical extrapolation. The sources of the substantial errors in St. Lawrence Seaway traffic forecasts have not been specifically identified, although a multitude of political and economic forces and the dynamic environment in which they operate are often cited (see, for exam- ple, TAF Consultants 2002). Factors affecting levels of seaway traf- ï¬c include the decline in automotive and steel industries in the Great Lakes region; a decline in European demand for North American grain as a result of the European Unionâs (EUâs) agricultural poli- cies, technology, and preferential trade agreements;11 a decline in grain exports from Canada and the United States to the former Soviet states following the Soviet Unionâs collapse; a geographic redistribution of international trading patterns, and in particular the growth of trade with Asia; a comparative decline in real over- land transport rates on competing routes; the worldwide shift to containerization; government policies; and a myriad of other forces that are difï¬cult to forecast.12 A recent forecast of future seaway trafï¬c appears more conser- vative than some of the earlier forecasts examined by Taylor and 11 Grain production in Western Europe has climbed steadily over the past 40 years because of a com- bination of new technology, high prices, and income support provided by the EUâs Common Agricultural Policy. As a result, the EU has been a grain exporter for more than two decades. 12 The difï¬culties encountered in attempting to forecast future trafï¬c on a speciï¬c trade corridor are not unique to the St. Lawrence Seaway. A report on inland navigation system planning for the upper Mississippi River and Illinois Waterway cites difï¬culties encountered by USACE in forecasting waterway trafï¬c to determine feasibility of improved navigation infrastructures and new waterway construction (NRC 2001). Examples include an effort to forecast future traffic on the upper Mississippi River system (Lock 26 at St. Louis, Missouri) and studies that focus on feasibility of the TennesseeâTombigbee waterway project. In particular, forecasts in 1975 and 1982 of trafï¬c at Lock 26 (St. Louis) in 1999 are about 60 percent greater than actual trafï¬c, and actual tonnage on the constructed TennesseeâTombigbee project is only 20 percent of forecast tonnage.
The St. Lawrence Seaway 31 Roach, although it still anticipates that trafï¬c in bulk commodities through the GLSLS system will âincrease gradually through to the year 2030 and grow steadily for the 20 years thereafterâ (Transport Canada et al. 2007, 47). Even the pessimistic scenario assumes that trafï¬c through the MLO section will grow, albeit at an average an- nual rate of only 0.1 percent, and will reach an annual tonnage of 33 Mt by 2050. Under the most likely scenario, the average annual growth rate is estimated to be 0.7 percent, with annual tonnage through the MLO section reaching 42 Mt by 2050.13 The forecast methodology is described as quantitative and qualitative econo- metric analysis, but few details are provided. A possible alternative approach to exploring the future role of the seaway and its importance for the Great Lakes regional economy could consider, perhaps in a scenario form, likely âfuturesâ and their realization in terms of trade and economic interdependence in the region. For example, it may be useful to examine the general question of how the geography of production and trade may evolve in the region over the next several decades. More speciï¬c questions to be considered could include the following: â¢ Will the regionâs increasing dependence on trade external to North America change the volume and composition of what is shipped into the region via the seaway? For example, will the move to greater containerization of international trade focus on a relatively small number of megaports, with a concomitant increased dependence on road and rail for movement of goods to interior destinations? â¢ Will North American export trade (physical as opposed to trade in services or information) move to greater reliance on nonmanufactured products (e.g., agricultural products, wood, minerals), thus generating increased possibilities for the use of the seaway, or will these exports be âdivertedâ to increasing domestic use in response to changes in relative prices and tech- nology (e.g., increased use of grains for ethanol production)? 13 For the 5-year period 2002â2006, annual tonnage through the MLO section averaged 32 Mt.
32 Great Lakes Shipping, Trade, and Aquatic Invasive Species Such scenario analysis was beyond the scope of the committeeâs charge but may be of interest in informing further examinations of the GLSLS systemâs future, particularly given the historical dif- ï¬culties in developing reliable trafï¬c forecasts. Alternatives to the Seaway The seaway has played, and continues to play, a key role in cer- tain marketsânotably the shipment of grain, iron ore, coal, and steelâwhere the constraints imposed by the seasonality of the navigation season and the relatively long transit times can be ac- commodated. Nonetheless, the seaway is only one component of the Great Lakes regionâs complex multimodal freight transporta- tion system. Within this system, alternative routes and modes com- pete for the various commodities moving within or through the region between supply and demand centers in North America and overseas. Consideration of modal competitive dynamics suggests that, in general, rail rather than truck is the most viable alternative to waterborne transportation for many of the relatively low-value bulk commodities moving on the seaway (see Table 2-1). For inter- national movements of such commodities, a number of compet- ing routes and modes to the seaway are available, as illustrated by the examples in Box 2-1. The relative advantages and dis- advantages of these competing routes and modes change over time in response to a host of dynamic forces, including the state of the Canadian and U.S. economies, the strength of the Canadian dollar and U.S. dollar relative to each other and to other curren- cies, fuel prices and associated transportation costs for different modes, and congestion at ports and other locations on the trans- portation network. In practice, the amounts and directions of commodity move- ments (trade) on the Great Lakes regionâs transportation network are influenced by a multitude of economic and political forces at both domestic and international levels. For example, a report prepared for Transport Canada examined seaway competitive- ness versus the Mississippi and rail options for the movements of grains (TAF Consultants 2002). The competitiveness of the GLSLS
The St. Lawrence Seaway 33 TABLE 2-1 Typical Characteristics of Shipments Moved by Different Transportation Modes Transportation Mode Shipment Characteristic Water Rail Truck Volume Very large Large to Medium to less of cargo single carloads than truckloads Inventory High Medium Low Product value Low Low to medium Medium to high Distance Variable, determined Medium to long Short to long by water links Relative transit Low Medium High time sensitivity Transportation Critical factor Important factor Secondary factor cost sensitivity NOTE: Table 2-1 has been adapted from a presentation to the Committee on the St. Lawrence Seaway, Phase 1, by Yves Lemieux of Canadian National and Malcolm Cairns of Canadian Pacific Railway in Montreal, Quebec, on September 28, 2004. system for moving Canadian grain was found to depend on mul- tiple factors, including world grain demand, Canadian grain supply, the available capacity of the western Canadian seaboard outlet,14 and the ability of the seaway to compete with alternative trans- portation systems in terms of total transportation costs and charges. The Canadian and U.S. governments subsidize the seaway through their provision of capital and maintenance funding, and these sub- sidies affect the waterwayâs competitiveness vis-Ã -vis other trans- portation modes. As already discussed, forecasting future traffic on one or more speciï¬c trade corridors is challenging and gener- ally unsatisfactory. Thus, while there are alternatives to the seaway for moving goods, the future competitive position of the seaway versus the various alternatives is difï¬cult to assess with any degree of certainty. 14 The seaway provides an overï¬ow route for Canadian grain exports in the event of delays at west coast ports due to capacity constraints or other factors.
34 Great Lakes Shipping, Trade, and Aquatic Invasive Species BOX 2-1 Competing Routes and Modes to the Seaway for International Commerce in the Great LakesâSeaway Hinterland An alternative Canadian routing to the seaway could involve export movements from hinterland locations (e.g., Ontario, Manitoba) via land-based transport, most likely railroads, to east coast Canadian (e.g., Quebec, Montreal) or Hudson Bay ports for transport by ship to international markets. Similarly, ship-transported Canadian imports may bypass the seaway by entering east coast or Hudson Bay ports for land-based shipment to interior locations. Much of Canadaâs increasing trade with Asia is bypassing the seaway via railroads that link interior Canadian regions and west coast ports. Finally, selected regions in Canada may find it feasible to access international markets through U.S. Gulf ports via a Canadian rail- road (Canadian National) or U.S. inland waterways. For example, if the Canadian dollar continues to strengthen against the U.S. dollar, such routings could become increasingly attractive to Canadian grain exporters because of the reduced logistics costs incurred at U.S. Gulf ports. Several alternative routes allow U.S. commerce in the Great LakesâSeaway hinterland to bypass the seaway. Interior U.S. locations may route international commerce through U.S. east coast or Gulf ports rather than the seaway. Often the commerce transshipping at Gulf ports moves via inland waterways and railroads while commerce to east coast ports is generally trans- ported by railroads. For example, U.S. trade with regions in eastern Canada (e.g., Labrador) can move by ship through the seaway or bypass this artery by moving directly to east coast U.S. ports for subsequent transport to interior locations by rail. As with Canada, the expanding trade with Asia is largely through west coast ports but facilitated by rail links with interior U.S. locations.
The St. Lawrence Seaway 35 A CHANGING FUTURE As the seaway is about to enter its sixth decade of service, it faces a variety of challenges and opportunities, some related to its aging infrastructure and others to environmental, economic, and social changes since its opening in 1959. The committeeâs information- gathering activities (see Appendix A) indicated that exploration of many of these challenges and opportunities is already being undertaken by a variety of organizations, most notably the two seaway corporations. These activities are referenced as appropri- ate throughout this report. The following paragraphs provide brief comments on two areas of change that the committee judged im- portant in the context of its efforts to identify and explore options for the Great Lakes region that will meet the two project criteria. Changes in global climate and in world maritime trade could af- fect both the numbers and the types of vessels using the seaway in the future and could, therefore, affect efforts to enhance the Great Lakes regionâs potential for global trade and to eliminate further AIS introductions by vessels transiting the seaway. Global Climate Change15 A number of studies completed over the past 20 years have inves- tigated the anticipated effects on the hydrology and lake levels of the GLSLS system as a result of climate change associated with increased concentrations of greenhouse gases in the atmosphere. Using increasingly complex general circulation models and emis- sions scenarios, these studies estimated changes in air and water temperatures, precipitation, runoff, and lake evaporation. These parameter estimates were then input into lake-level routing models and ice formation models to assess impacts on ice cover, water levels, and ï¬ows. With one exception, all of the models resulted in lower lake levels and a large reduction in ice cover, both of which would affect navigation. 15 The following discussion draws extensively on an expert paper commissioned by the committee on global climate change and international Great Lakes shipping (Millerd 2007).
36 Great Lakes Shipping, Trade, and Aquatic Invasive Species The depths of the Great Lakes are such that navigation on the open lakes would not be affected by the lower water levels associ- ated with climate change. However, navigation in shoal areas, in connecting channels between the lakes (the St. Maryâs, Detroit, and St. Clair Rivers), in sections of the St. Lawrence Seaway, and in harbors would become problematic if water levels decline as predicted by the models. As shown in Table 2-2, anticipated aver- age water levels in the Port of Montreal would decrease, and the dif- ference between minimum and maximum levels would increase. The maximum allowable vessel draft in the seaway locks and nav- igation channels would also decrease, with the result that additional trips would be needed to carry the same amount of cargo. For a lake vessel moving grain out of the lakes to the lower St. Lawrence River of the Gulf of St. Lawrence, it has been estimated that a reduction in draft of 1 m would reduce the cargo-carrying capacity by 17 percent (Millerd 2007). The seaway is closed every winter because ice conditions make use of the locks difï¬cult and winter navigation in restricted chan- nels presents environmental problems. As a result of milder winters, however, there has been a gradual increase in the length of the seaway navigation season since the 1980s. Hence, for the 5 years from 1982 to 1986, the average open period for the MLO section was 269 days. For the 5 years from 2002 to 2006, it was 279 days, TABLE 2-2 St. Lawrence River at Montreal Jetty 1 Quarter- Monthly Mean Level Statistics for Climate Change (Base Case and Different Scenarios Simulated with Plan 1958D with Deviations) Base Warm and Not as Warm Warm and Not as Warm Case (m) Dry (m) and Dry (m) Wet (m) and Wet (m) Average 6.80 5.74 6.10 5.98 6.65 Maximum 9.21 8.78 9.14 9.19 9.16 Minimum 5.01 4.31 4.45 4. 41 4.92 Difference, max â min 4.20 4.47 4.69 4.78 4.24 SOURCE: Fay and Fan 2006.
The St. Lawrence Seaway 37 an increase of 10 days. And in 2006, the MLO section was open for a record 283 days. The reduced ice cover associated with climate change may offer the possibility of further extending the seaway navigation season, although there are no current plans to do so. The condi- tions allowing for opening of the navigation season would occur earlier, and conditions requiring closing the locks would occur later. Thus, the adverse effects of lower water levels on navigation could be offset to some extent by a longer navigation season. A longer navigation season could, however, complicate main- tenance and replacement schedules. Some period of closure is required every year for regular maintenance and inspection because the majority of lock sites throughout the system possess only one lock chamber and no parallel or auxiliary chambers (Transport Canada et al. 2007). Thus, in the absence of lock âtwinning,â it is not possible to conduct all the necessary maintenance while the system is operational. As already noted, the winter shutdown of the seaway provides an opportunity to conduct lock maintenance and mechanical overhauls and to replace machinery and other parts while there is no shipping using the system. Maintenance engi- neers suggest that this regular annual maintenance could be done in 1 month, providing no major problem is encountered. Every 3 to 5 years, however, lock machinery requires major maintenance, replacement, and upgrading, and resurfacing of lock walls may be necessary, requiring at least 2 months. Thus, for many years a maintenance closure of 1 month would suffice, but every third to ï¬fth year a longer closed period would be required. Mainte- nance procedures and schedules would have to be rearranged and more outside contractors may need to be hired to accommodate the shorter periods of closure. The increased maintenance require- ments associated with aging of the locks could also complicate efforts to extend the navigation season. As the preceding paragraphs indicate, the direct effects of global climate change on seaway navigation are expected to be mixed, with the adverse impacts of lower water levels offset to some extent by a longer shipping season. However, policies aimed at reducing
38 Great Lakes Shipping, Trade, and Aquatic Invasive Species transportation-related greenhouse gas emissions could favor water- borne freight transportation over competing surface modes. An expert paper commissioned by the committee (Lawson 2007) indicates that ships are generally more âenvironmentally friendlyâ than trains and trucks in terms of greenhouse gas emissions, although data limitations preclude detailed quantitative comparisons. In addition to long-term changes associated with global climate change, cyclical variations in water levels in the Great Lakes affect navigation from time to time. Changes in World Maritime Trade As already discussed, steps have been taken to maximize the amounts of cargo carried by vessels transiting the seaway by increasing the allowable vessel draft and length. Nonetheless, an analysis con- ducted in 2001 showed that, while 70 percent of vessels in the world ï¬eet can be accommodated by the seaway locks, these seaway-size vessels represent only 13 percent of world vessel capacity (USACE 2002). In particular, less than 2 percent of the worldâs bulk fleet by capacity and less than 5 percent of its container fleet can use the seaway. Furthermore, larger vessels are under construction or entering service, indicating that the percentage of the world fleet able to transit the seaway is likely to decline in the foresee- able future. The continued rapid growth of containerization is widely ac- knowledged as a key factor likely to inï¬uence future world maritime trade. The advent of the cargo container and of small and large ships designed to carry nothing but containers has been a major step in expediting the transoceanic movement of general cargo and has introduced a new connotation to âtransshipment.â It has led to the establishment of transshipment hubs, strategically located in shel- tered deepwater locations adjacent to major trade routes, where container shipments are consolidated by destination. Designed to minimize the costs of transporting goods between shipper and consignee, these hub ports service feeder containerships that move containers in a local area, larger containerships on dedicated transoceanic routes, and the megacontainerships that continually
The St. Lawrence Seaway 39 circumnavigate the globe. Hub ports aim to limit the number of port calls and overall port time for the ships they service and to receive, sort, and reship containers so that they reach their intended destination by the fastest possible route. Such facilities are in oper- ation, are under construction, or are being promoted around the world in locations such as Tanjung Pelepas, Malaysia; Singapore; Colombo, Sri Lanka; Manzanillo, Panama; Freeport, Bahamas; Kingston, Jamaica; the Malta Freeport; Sydney, Nova Scotia; and Scapa Flow, Scotland. New waterborne feeder services throughout the GLSLS system could serve the existing containerport in Halifax, Nova Scotia, or a possible new hub port for container transshipment in Sydney, Nova Scotia. It has been suggested, for example, that ships built for the purpose could move containers to the Lake Ontario port of Hamilton, where they would be distributed throughout the Great Lakes basin.16 Questions remain about the effects of relatively long transit times and seasonal closure on the demand for container shipping on the GLSLS system (see Chapter 5). Nonetheless, the fact that future container feeder services are being explored indi- cates that efforts to prevent further AIS introductions into the Great Lakes by vessels transiting the seaway need to recognize the possi- bility that the mix of vessels using the seaway may be different from that of today. The ports of origin of these vessels may also be dif- ferent, with an increase in the proportion of trafï¬c from coastal areas of eastern North America providing feeder services into the Great Lakes. CONCLUDING REMARKS The binational GLSLS system, which includes the St. Lawrence Seaway, stretches over 2,300 miles (3,700 km) from the Gulf of St. Lawrence to the western shores of Lake Superior. The 1959 16 Opportunities for container shipping on the GLSLS system are discussed in the recent GLSLS study (Transport Canada et al. 2007).
40 Great Lakes Shipping, Trade, and Aquatic Invasive Species opening of the MLO section of the seaway was the final step in establishing a navigation system that allows deep-draft ocean ves- sels to move between the Atlantic Ocean and Great Lakes ports. In the almost 50 years since its opening, the MLO section has handled 1.9 billion tonnes of cargo. Although trafï¬c volumes in recent years have been about half the peak levels of the 1970s and early 1980s, the seaway continues to play a key role in the shipment of grain, iron ore, and steel. Seaway trade is particularly important for Canada, which paid more than 70 percent of the total cost of the original seaway navigation project and continues to play a greater role than its U.S. partner in ï¬nancing and operating the waterway. Forecasting future seaway trafï¬c has historically proven prob- lematic because of the multitude of economic and political forces affecting trade, both within the Great Lakes region and beyond. In addition, the seaway is only one component of the larger Great Lakes transportation system, which offers a variety of alternative routes and modes for moving cargoes. As the seaway enters its sixth decade of service, its future role within the Great Lakes transportation system is unclear. This observation does not imply that the waterway has no future role, but rather that this role remains difï¬cult to anticipate because of the numerous uncertainties. On the one hand, the seaway infrastruc- ture is in need of major renovation to ensure its continuing relia- bility, and the waterwayâs locks can accommodate only a decreasing fraction of world vessel capacity as the growth of container ship- ping leads to the building of ever-larger vessels. On the other hand, the seaway offers an alternative to increasingly congested land- based routes, particularly for cargo movements where the rela- tively long transit times and seasonality of the navigation season can be accommodated. Furthermore, the growth of hub ports for container shipping on North Americaâs eastern seaboard may pro- vide opportunities to develop feeder services into the Great Lakes through the seaway. The overall inï¬uence of global climate change on seaway navigation is also uncertain, with the possibility that the adverse effects of lower water levels may be offset to some extent by a longer navigation season.
The St. Lawrence Seaway 41 REFERENCES Abbreviations NRC National Research Council SLSDC St. Lawrence Seaway Development Corporation USACE U.S. Army Corps of Engineers Cangelosi, A., and N. Mays. 2006. Great Ships for the Great Lakes? Commercial Vessels Free of Invasive Species in the Great LakesâSt. Lawrence Seaway System: A Scoping Report for the Great Ships Initiative. Northeast-Midwest Institute, Washington, D.C. www.nemw.org/ scopingreport.pdf. Fay, D., and Y. Fan. 2006. Hydrologic Scenarios for the Evaluation of Lake Ontario Reg- ulation Plans. Presented at 59th Canadian Water Resources Association Conference, Toronto, Ontario, Canada, June 4â7. Ghonima, H. 1984. The Seaway Economic Planning SystemâComputer Model Program (SEPS-CMP): An Essential Planning Tool. Presented at the Annual Conference of the Canadian Transportation Research Forum, Jasper, Alberta, Canada, May. Jenkins, P. T. 2007. Brine as a Treatment Solution for the Control of Aquatic Nuisance Species Introductions into the Great Lakes by NOBOB Vessels. Prepared for Transport Canada Marine Safety by Philip T. Jenkins and Associates, Ltd., Fonthill, Ontario, Canada. Lawson, J. 2007. The Environmental Footprint of Surface Freight Transportation. Lawson Economics Research, Inc., Ottawa, Ontario, Canada, June. Millerd, F. 2007. Global Climate Change and Great Lakes International Shipping. Wilfrid Laurier University, Waterloo, Ontario, Canada, May. NRC. 2001. Inland Navigation System Planning: The Upper Mississippi RiverâIllinois Wa- terway. National Academy Press, Washington, D.C. SLSDC. n.d. U.S. St. Lawrence Seaway Asset Renewal Program Capital Investment Plan FY 2009â2013. www.greatlakes-seaway.com/en/home.html. TAF Consultants. 2002. Seaway Competitiveness Versus the Mississippi and Rail Options for the Movements of Grains. Prepared for Transport Canada. May 15. Taylor, J. C., and J. L. Roach. 2005. Ocean Shipping in the Great Lakes: Transportation Cost Increases That Would Result from a Cessation of Ocean Vessel Shipping. Grand Valley State University, Grand Rapids, Mich., Aug. www.gvsu.edu/cms3/assets/C6D78A67- 0AEF-0264-A38619EC6FB0793A/OceanShippingReport091105.pdf. Taylor, J. C., and J. L. Roach. 2007. Ocean Shipping in the Great Lakes: An Analysis of Issues, Phase 2. Grand Valley State University, Grand Rapids, Mich., Oct. www.gvsu.edu/ business/index.cfm?id=11971F16-DBAF-2179-96B0680A95CC6F83. Transport Canada. 2001. Maximization of Ship Draft in the St. Lawrence. Report TP 13888. www.tc.gc.ca/TDC/projects/marine/a/9883.htm.
42 Great Lakes Shipping, Trade, and Aquatic Invasive Species Transport Canada, U.S. Army Corps of Engineers, U.S. Department of Transporta- tion, St. Lawrence Seaway Management Corporation, Saint Lawrence Seaway De- velopment Corporation, Environment Canada, and U.S. Fish and Wildlife Service. 2007. Great Lakes St. Lawrence Seaway Study. Final Report. www.glsls-study.com/ Supporting%20documents/GLSLS%20finalreport%20Fall%202007.pdf. USACE. 2002. Reconnaissance Report: Great Lakes Navigation System Review. June. U.S. Congress. 1897. Report of the United States Deep Waterways Commission. House Document 192, 54th Congress, 2nd session. BIBLIOGRAPHY ON SEAWAY HISTORY American Great Lakes Ports Association. St. Lawrence Seaway Tolls. www.greatlakes ports.org/tolls.html. American Presidency Project. Letter from Harry S. Truman to Committee Chairmen on the St. Lawrence Seaway and Power Project, April 19, 1952. www.presidency.ucsb.edu/ ws/print.php?pid=14087. Environment Canada. The St. Lawrence SeawayâGreat Lakes Waterway. www.ec.gc.ca/ soer-ree/English/SOER/1996report/Doc/1-6-6-4-4-2-1.cfm. Great Lakes St. Lawrence Seaway System. Seaway History. www.greatlakes-seaway.com/en/ aboutus/seaway_history.html. Infrastructure Canada. History of the St. Lawrence Seaway. www.infrastructure.gc.ca/ research-recherche/result/alt_formats/pdf/hm05_e.pdf. McConville, D. J. 1995. Seaway to Nowhere. American Heritage of Invention and Technol- ogy, Vol. 11, No. 2, Fall, pp. 34â44. U.S. Environmental Protection Agency and Government of Canada. 1995. The Great Lakes: An Environmental Atlas and Resource Book (3rd ed.). www.epa.gov/glnpo/ atlas/index.html.