No one ever was fired for buying IBM. So the saying used to go in the information technology business.
In other words, when in doubt, go with the tried and true. That way, if things go wrong, you don’t have to explain to a boss who may not want to listen.
Vanta Coda, executive director of the Duluth Seaway Port Authority, sees a bit of that attitude in the logistics industry, particularly when it comes time to decide whether to route cargo through the Great Lakes.
Duluth has developed a solid business in heavy-lift and project cargo at the western end of Lake Superior, 2,340 miles from the Atlantic. This fall, the port will open 28 acres of additional open storage and a new dock that will handle loads of 2,000 pounds per square foot.
Coda sees the Lakes as a logistics asset that’s under-appreciated and underutilized.
Yes, the system is closed two months every winter. Yes, it’s farther from open sea than coastal ports. Yes, carriers have to arrange backhauls and concentrate their calls in order to have a profitable voyage.
But Coda says that for some shipments, a Great Lakes routing can make sense for supply chain managers. The Lakes never will be a major container gateway, but there still are many cargoes that won’t fit into a box.
For shipments of energy-producing windmills or other project cargoes to the interior of the U.S. or Canada, Duluth has higher water transportation costs than East Coast ports. But land transportation is less costly, and Coda adds, “We have less than one-tenth the congestion in Duluth that they have.”
Duluth is the closest port to the biggest U.S. cluster of wind energy farms. The port has handled oversize shipments for oilfields in the Dakotas and Alberta and for mining industries. Farther east, other Lakes ports have developed niche specialties in breakbulk and project shipments such as steel and machinery.
Oilfield and mining industries are in a slump caused by low prices, but Coda is confident they’ll come back. “It’s a typical commodity cycle, something we’ve dealt with for more than 100 years,” he said. “The mines are not going anywhere, we know that. It’s a market that ebbs and flows.”
As Coda watches coastal ports spend hundreds of millions of federal and state funds to dredge harbors to handle ever-larger vessels, he can’t help noticing the contrast with untapped capacity on the Lakes.
So what would it take to increase Lakes utilization?
Coda thinks it’s largely a question of awareness, and persuading supply chain managers to consider Lakes routings. He says that’s difficult in an era when companies have downsized and the remaining managers try to play it safe and stick with the familiar — even if there may be a better alternative.