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St. Lawrence Seaway Key to International Trade Strategy

The chief executives of the two St. Lawrence Seaway management corporations oversee billions of dollars of national infrastructure that is integral to the success of Canadian and American exports.  Read excerpts from their recent speeches at economic clubs and chambers of commerce in cities around the Great Lakes-Seaway region.


Collister Johnson, Jr., Administrator, Saint Lawrence Seaway Development Corporation

Collister Johnson, Jr., Administrator, Saint Lawrence Seaway Development Corporation
Greater Cleveland Partnership - March 28, 2012

The Seaway officially opened last Thursday for its 54th navigation season. We are looking forward to a good trade year; the Seaway is often viewed as a bellwether for the overall economy and it seems to be on the rebound.

The Seaway supports the supply chain from North America’s bread basket to countries around the world.

...Iron ore accounts for the largest volume of cargo shipped through the Seaway navigation system. It is all used in the production of steel – 80% used in the U.S. steel industry; and supports more than 60 steel manufacturers in Ontario.

North American farmers depend on the Seaway to move wheat, barley, soybeans and corn to domestic and international markets each year. Grain accounts for about 10% of the combined total of all U.S. and Canadian grain exports.

In August of 2010, Russia had ¼ of its grain crop destroyed by drought and fire….That situation was an unexpected boon for U.S. grain exporters. The Port of Duluth was able to move 14 ships that summer with wheat through the Seaway System to benefit those in need.

This is one small example of the strategic value of the Seaway navigation system. Without the benefit of this water highway, the U.S. could not be as nimble in moving product to international markets. The Seaway also helps keep transportation costs competitive and enables businesses to complete globally.

Since its inception, over 2.5 billion tons of cargo valued in excess of $375 billion has been transported via the Seaway to and from over 50 nations.

Almost 25% of Seaway traffic travels to and from overseas ports – Europe, Middle East, Africa, India, Asia, and South America.

Its impact is felt throughout North America – and not just in the eight Great Lakes states – most of the goods used by the bi-national citizenry on any given day has likely been on a ship that travelled through the Seaway - the grain for cereal you eat in the morning, the steel used to make cars and appliances, the asphalt and aggregates used to build highways, cement for construction, and wood for furniture to name just a few.

Dozens of manufacturing plants from Cleveland to Milwaukee depend on the Seaway-delivered steel slab, coil, and rebar that are vital for America’s economic health. Imported steel is in everything from transformers, generators and motors to alkaline batteries and food cans. American and Canadian businesses benefit as the employees in Kalzip of Michigan City, Indiana or Cogent Power in Burlington, Ontario will tell you. The domestic steel industry needs raw materials like coking coal for production and thousands of tons annually move through the Seaway to integrated steel plants in Detroit, Chicago, Gary and Cleveland.

I’ve been on the job for 5 1/2 years and during that time I’ve witnessed first-hand the scale and geographic reach of the Systems’ economic clout.

An Economic Impact Study was released this past October and the combined economic impact was larger than we expected:

  • 227,000 jobs
  • $33.5 billion in economic revenue
  • $14.1 billion in wages & salaries
  • $4.6 billion in federal, state and local taxes

 

The Seaway System has a significant impact in Ohio:

  • 116,000 total jobs
  • $6.4 billion in personal income
  • $23.7 billion in business revenue

 

Breaking out the numbers for the Ports of Cleveland and Toledo shows:

  • 25,000 direct jobs
  • $1.6 billion in personal income
  • $2.2 billion in business revenue
  • $260 million in state and local taxes

 

...The Seaway is investing in its future. Starting in 2009, SLSDC’s Asset Renewal Program marked the first time in our 50+ year history that a comprehensive effort had been undertaken to reinvest and modernize the U.S. Seaway infrastructure, including the rehabilitation of the two U.S. Seaway locks, the Seaway International Bridge, and other facilities in Massena, NY.

The ARP is resulting in not only modernized infrastructure and new equipment to ensure the long-term reliability of the St. Lawrence Seaway, but it is also having a positive and significant impact on the Upstate New York economy. Nearly 70 percent of the ARP funds used during the program’s first three years, totaling nearly $35 million, stayed in the regional economy.

...We see the future holding great promise: the Seaway System continues to be a job producer, it provides a competitive advantage for businesses, and it is adaptable to meet shifts in trade patterns. The results will lead to project cargo gains and new global markets. Let me discuss a few before I close.

Short Sea Shipping – Container cargo. Cross-lake trade offers route time and cost savings. We need to replicate in the Lakes what the Europeans have been doing so well for years – short sea shipping – moving high-value, non-bulk freight, and partnering with rail and truck operations. Bringing container shipping to the Lakes holds great promise.

While iron ore, coal, grain, steel and stone aggregate are still at the top of the tonnage list, increasingly, high value project cargoes in the energy and mining industries are entering the System. We are also seeing an emergence of a niche market in wind energy components coming into the Lakes from manufacturers in Europe.

Environmental Stewardship – This year the System will welcome the first of 25 new ships from two Canadian companies built to be more fuel efficient and environmentally friendly. The combined investment represents $1.1 billion over the next three years. In addition to the latest engine technology and hull designs, fuel efficiency will increase by 40 percent, and sulphur emissions will be reduced by 97 percent when equipped with flue gas scrubbers.

...The opening of the 54th Seaway season heralds some exciting new developments as the System moves into a new era of investing in infrastructure, new ships and innovative technology.

The two Seaway entities are committed to building upon the System’s strong record of reliability and efficiency, enabling carriers to offer a highly competitive and environmentally sustainable means of moving cargoes to and from global markets.