Great Lake Expectations

Never mind what a local newspaper said, the Emma Maersk will not be calling at the Port of Oswego, N.Y. For one thing, the St. Lawrence Seaway offers only half the depth the 11,000-TEU container ship needs to stay afloat.

But that doesn’t mean the small port on Lake Ontario is giving up on containers from the Emma Maersk or other deep-water vessels landing at Oswego for transshipment to rail or truck.

According to Jonathan Daniels, the port’s director, Oswego is discussing the possibility of feeder service from the ports of Montreal or Halifax, or the $300 million Melford International Terminal that’s expected to open in 2011 on Nova Scotia’s Strait of Canso.

The notion of shuttling containers into the Great Lakes to avoid congested East Coast ports has been a long-held goal for the ports on either side of the border of the lakes.

Many look to the region as an area where short-sea shipping is likely to blossom whenever the combination of highway gridlock, punishing fuel prices and the benefits of green transportation convince shippers the marine highway is the right way to move their goods.

That day hasn’t arrived despite the efforts of short sea’s biggest boosters. But the prospect seems close enough that Daniels is willing to put money on the line. The fiscal 2009 federal budget Congress approved this month includes a line item — yes, an earmark — of $237,000 for Oswego to improve connector roads and security for its terminal. That will be followed by a $2 million investment to build and equip a 15-acre container facility.

“I would be surprised if we do not see the first shipment of containers here in the next 365 days,” Daniels said. Last year’s surge in fuel prices got shippers thinking, he said. “We found that shippers of cargo moving to end-users in the Oswego area, that were not using the port, all of a sudden found that waterborne transportation was more cost-effective,” Daniels said.

To say there’s room for short-sea feeder service to grow on the Great Lakes is an extreme understatement. According to St. Lawrence Seaway Management, the Canadian company that manages the Canadian portion of the Seaway, container shipping is barely visible in the mountains of coal, grain, steel, stone and other bulk commodities that fill Great Lakes carriers.

In 2007, the management company said ocean and lake ships moved 23,377 metric tons of containers on the lower reaches of the Seaway that connects Montreal and Lake Ontario. Beyond the Welland Canal into Lake Erie, however, container traffic plunged to 871 metric tons. When it computes the capacity of its ships, Maersk estimates an average container weighs 14 tons. Do the math, and the containers that sailed into Lake Ontario would barely fill a 10th of the Emma Maersk’s container cells.

Daniels said he understands the impediments to developing a short-sea industry on the lakes. For starters, the Seaway closes for the winter. Traditionally, January and February are slow shipping seasons, but for shippers that need year-round service, there have to be alternatives.

“Your shipper or forwarder understands that it’s a full logistics package that may not be waterborne 12 months out of the year. There may be transit by rail or truck,” Daniels said. “It’s up to the shipper; there has to be a significant value proposition with an understanding of the limitations.”

This winter, Oswego is receiving cargo that would be a candidate for water movement during the warmer months. The port is receiving aluminum stock by rail, storing it in the port warehouse and loading it on trucks for delivery to a local company that manufactures sheet aluminum for beverage cans it delivers by truck.

Although a feeder system that lands containers in Oswego, Cleveland or Detroit would give shippers access to Midwest markets, it’s not for everyone, Daniels said. “If you’re a shipper who’s getting cargo just-in-time, certainly there’s an adjustment that needs to be made,” he said. There’s additional time in transit, the added transit time for feeder service into the Great Lakes from an East Coast port, but it compares well with cargo that lands on the West Coast and moves across Canada by rail.

“A lot of shippers are looking for what alternatives are out there, so they’re not dependent on one form of transportation,” Daniels said. “Diesel prices have come back down, but shippers are saying they need to have a full logistics plan in place, an integrated plan that they can put into action any time.”

Contact R.G. Edmonson at bedmonson@joc.com.