In 1984 - the last year for which complete data are available - about 40 million tons of cargo moved between the United States and Canada in the Great Lakes/St. Lawrence Seaway system. Of this total, only about 6 percent was transported on U.S.-flag ships - down from 30 percent in 1953. On the Seaway proper, which opened in 1959, U.S.-flag participation has never been more than 5 percent, and some years, including 1984, less than 1 percent.
This data comes from a report by the General Accounting Office. The study was undertaken at the insistence of House Merchant Marine and Fisheries Committee Chairman Walter B. Jones and nine U.S. Representatives from states along the Great Lakes.GAO attributes this state of affairs to a number of factors: higher U.S. vessel operation and construction costs; modernization of the Canadian Great Lakes fleet that began with the Seaway opening; difference in Canadian and U.S. government assistance programs; factors such as geography, long-term contracts and domestic trade policies that are advantageous to Canadian trade operators; and concentration of U.S. fleet operators on domestic traffic.
Echoing the findings of the GAO report, Gary S. Misch, associate Administrator for Marketing and Domestic Enterprise for the U.S. Maritime Administration in recent testimony before the House Subcommittee on Oversight and Investigations of the House Merchant Marine and Fisheries Committee, summarized:
"The opening of the St. Lawrence Seaway in 1959 provided new opportunities for both Canadians and U.S. operators. The Canadians undertook an extensive program of fleet renewal...The U.S. operators, on the other hand, focused their resources almost exclusively on the domestic trade in coal, ore and limestone, and did not tailor their vessel operations to take advantage of the Seaway improvements. Since their vessels were already well suited to this domestic trade, there was no large scale U.S.-flag fleet renewal at that time...Given the situation existing in 1959, it is not surprising that the U.S. and Canadian vessel operators made their respective market decisions. At the time, the Canadians had greater incentives to modernize and expand their existing cross-border trade than did the U.S. operators."
Interestingly, neither the GAO Report, nor Mr. Misch deal with two major reasons for the almost total absence of U.S.-flag presence in U.S./Canada Great Lakes/Seaway trade:
(1) This trade is almost exclusively a bulk trade involving to a great extent low-rated commodities. Consumer goods and other merchandise, which would support a liner operation, have always moved overland, in railcars and trucks.
(2) The seasonal closure of Great Lakes and Seaway traffic during the winter months. This closure precludes an economically viable operation without government support, particularly when it involves more modern and often capital-intensive vessel operations.
In fact, U.S. operators cannot even maintain their old tonnage. According to the latest U.S. Merchant Marine Data Sheet published by Marad, the U.S. Great Lakes Merchant Fleet, as of June 1, consisted of 116 vessels (103 bulk carriers, 4 tankers and 9 "others"), of which more than half (52 bulk carriers, 1 tanker and 8 "others" - for a total of 61) are laid-up and ''inactive." In gross registered tonnage, these 61 ships represent 39 percent (572,537 grt of a total of 1,469,381 grt) of the U.S.-flag fleet.
But there is still a more disturbing fact. The GAO Report makes no recommendation of how to stop the downward slide of U.S. presence in this trade, and neither does Mr. Misch. The Marad official states that "from fiscal year 1975 to present, we have spent nearly $4 million on some 40 research and development projects concerning Great Lakes shipping." But, significantly, he does not mention a single positive result brought about by this R&D. He then concludes in a fashion that is typical for the employee of a government agency that under the current administration has become powerless and totally ineffective in its primary task of promoting U.S.-flag shipping:
"We share the concern of the members of the subcommittee and the Great Lakes shipping community over the declining U.S. share of the cross border trade. But we believe that new Federal subsidies or other types of governmental intervention are not effective ways to increase U.S.-flag participation in that trade."
So, what else is new?