Container shipping making waves on St. Lawrence/Great Lakes system

·15 min read

Sep. 12—On Monday, the container ship Peyton Lynn C, which loaded in Antwerp, Belgium, passed through the locks in Massena and Iroquois, Ontario, on her way upriver on the St. Lawrence heading for the Great Lakes. In her wake, her owners believe, may be a new era in regards to a shipping method for the international waterway.

Industry experts say that about 90% of non-bulk cargo worldwide is transported by container ships, with large coastal ports along the Atlantic and Pacific oceans the hubs of that activity. But the container vessel business model has begun to create ripples in the St. Lawrence and Great Lakes.

At the Port of Oswego, executive director William W. Scriber is excited for its potential but extremely frustrated about the delay in its implementation on the Great Lakes and especially at his port, which he says is due to the red tape of U.S. Customs.

"This has been one of my major gripes for years here," Mr. Scriber said. "We're held back from reaching the potential of a container port on the Great Lakes. We're the only port in New York state on Lake Ontario. We would be the perfect, perfect place for the dropping of containers here."

Meanwhile in Montreal, by 2024, with the support of Canada Infrastructure Bank and private partners, the port intends to develop a new state-of-the-art container terminal to handle 1.15 million 20-foot equivalent units per year.

"This project will strengthen our world-class logistics hub in the heart of the St. Lawrence Valley," the port announced in a news release.

In June, the MSC Melissa, the largest container ship to sail the St. Lawrence, arrived in Montreal before heading back to Europe. The dimensions of the vessel (994 feet long and 131 feet wide) are too large for further upriver travel through the Seaway lock system.

In Ohio, at the Port of Cleveland, its operators are excited to see its container shipping operations grow, with the help of ships like the Peyton Lynn C. In 2014, the port invested millions of dollars into a project that allows for the handling of container ships.

"We saw the need for a container service on the Great Lakes," said David S. Gutheil, chief commercial officer for the Port of Cleveland. "There's been a lot of studies over the years. We're handling a few thousand containers a year and we're happy now that Spliethoff is adding another vessel to grow the business."

The Peyton Lynn C. was purchased by H.R. Doornekamp Construction/Shipping Services Ltd., a family owned business based in Odessa, Ontario, about 12 miles from Kingston. It also owns and operates Picton Terminals, located in Prince Edward County in northeast Lake Ontario.

Doornekamp's first vessel, the Peyton Lynn C is being leased by Spliethoff, a worldwide ocean transport company. Peyton Lynn C was built in 2007 and is on her maiden voyage under new owner Doornekamp. She will be sailing a regular schedule between the ports of Antwerp (Belgium), Picton, Ontario, and Cleveland under long-term charter by Spliethoff.

Peyton Lynn C is scheduled to discharge her container cargo in Picton, continue to Cleveland for discharge and loading before heading back to Antwerp. Transit time is 12 days to Picton and 15 days to Cleveland. It's part of Spliethoff's Cleveland Europe Express (CCE) in response to the high demand for tonnage between Europe and the Great Lakes.

"We're going from two calls per month to three calls per month on our container service," Mr. Gutheil said.

Containers, he said, can carry anything from foodstuffs to automobile parts.

"From a container standpoint, typically it's more cost-effective to move goods, depending on how much goods you have in a single container, than it is in break bulk," Mr. Gutheil said. "Moving the cargo in a container certainly makes it much more efficient when the container is discharged off a vessel, picked up by truck and taken to its final destination."

Benjamin Doornekamp, owner of Doornekamp Construction and Picton Terminals, said the Peyton Lynn C was modified for the Seaway and Great Lakes system and will be the only vessel that's designed to solely focus on containers with a regular route on the system. The CEE service has run mainly with Spliethoff-owned versatile multi-purpose "tweendecker" vessels, able to carry a variety of cargo types, but Peyton Lynn C carries containers only.

"There's been a few other one-off tries and odd times when the Port of Montreal was on strike, or the rail was blocked," Mr. Doornekamp said. "I've seen some others that might be trying it, but this seems to be the first that's coming, and repeating, coming directly from Europe."

Michael J. Folsom, founder of the St. Lawrence Seaway Shipwatchers Facebook group and an industry expert, said that the addition of Peyton Lynn C provides new opportunities for trading between Europe, Nova Scotia and the Great Lakes.

"Between cost cutting on shipping by getting containers further inland to a potential need for more port workers to offload cargo, while adding another vessel in the container business, it's a good thing for the industry," Mr. Folsom said.

A few vessels hauling containers were seen in the early days of the Seaway, which opened in 1959.

"Back when containerization came to fruition in the global maritime industry back in the late '60s, early '70s, there were a few scheduled services on the Great Lakes," said Mr. Gutheil. "But as containerization grew and grew, the ships became larger and larger and the ships became too large to get in the St. Lawrence Seaway through the locks. That's when the coastal container business out of the large ports started to grow in stature, size and importance."

Mr. Doornekamp said that the Peyton Lynn C is a diversification of the company's construction, property management and port operations. He said the company is well-situated for the development of container vessel shipping. The company purchased Picton Terminals in 2015. It was built in 1953 for Bethlehem Steel to ship pelletized iron ore to the USA. Since the late 1970s, its infrastructure had been dormant

Mr. Doornekamp said that with his company owning the container ship and the revitalized Picton port, it makes container shipping more economically feasible.

"It just simplifies it," he said. "Whenever you simplify something, it's typically cheaper."

One historical drawback to the container method, he said, has always been the Seaway's annual three-month shutdown. Another, he said, is the lack of ports designed to handle containers.

"Another main blocker is that anybody who has sort of tried to do containers in the past, in most situations, there was a port at each end, stevedores at each end, agents at each end and ship owners," he said. "There was always six to 10 hands in the cookie jar trying to get money out of it and making it very, very expensive."

It's a situation with too many people owning different assets, Mr. Doornekamp said.

"In our case, we're the owner of the ship, we're the owner of the port, we're the owner of the trucks. The only part of the puzzle we don't own is the Port of Halifax."

The Peyton Lynn C is also scheduled to make regular stops at Halifax, the largest municipality of the Canadian province of Nova Scotia.

"They'll be one of the ports of call, but Picton being the main call, and Cleveland for the U.S.," Mr. Doornekamp said.

Doornekamp also owns a second ship, the Vivienne Sheri D, scheduled to come on line soon. She is not yet fitted for the Seaway and won't be traveling the river for at least the next two years. It's assigned route now is Europe to Halifax and Portland, Maine.

Doornekamp is also in the process of purchasing a third and fourth ship, Mr. Doornekamp said.

"With the big shipping companies, their big ships can't fit down the Seaway," he said. "We made some modifications to get the biggest possible ships through the Seaway for economy of scale. It's a positive for customers, because it's one-stop from Europe to say, Ontario or to northern U.S."

Steven J. Lawrence, executive director of the Ogdensburg Bridge and Port Authority, said port officials have given some thought about the potential that shipping containers could bring.

"But usually, it's not in numbers that work," he said.

The Ogdensburg port does deal with containers related to shipments of windmill parts that come in. Related parts like electrical panels are shipped in the containers.

"We've got the large forklifts to handle them," Mr. Lawrence said. "But at this point, where we're located, there's not a real market to move by containers. There's other options. Ours are just on a project basis."

In Oswego, Mr. Scriber is frustrated that the potential for the increased business that container vessels could bring his port is sailing on by. About seven years ago, the port, a state agency, purchased container movers. The port also has rail service directly to the water and is on the Barge Canal, enticing opportunities for the movement of containers.

"We were going to be one of the major container operators from the St. Lawrence into the Great Lakes," Mr. Scriber said. "We have two operational container movers we purchased in anticipation of the possible use of containers here."

The issue preventing it, he said, is one shared by the Port of Monroe in Michigan: Restrictions placed upon them by U.S. Customs and Border Protection.

"I'm not looking for a fight with Customs," Mr. Scriber said. "I'm just simply saying there needs to be a sit down discussion on Customs' regulations as it affects the 'one size fits all' on the Great Lakes."

He said the Port of Oswego is in the same boat with the Port of Monroe in Michigan. On Aug. 21, U.S. Sen. Gary Peters, chairman of the Homeland Security and Governmental Affairs Committee, toured the Port of Monroe with Customs and Border Protection (CBP) officials, including acting Commissioner Troy Miller, and port leaders to assess operations and discuss resolving ongoing cargo clearance challenges the port faces. Mr. Peters has said the port has been restricted by CBP's Detroit Field Office from accepting international break bulk cargo and prohibited the port from accepting international maritime containers, unless the port invested in significant and costly screening technology and infrastructure upgrades.

The Port of Cleveland and Port of Oswego, Mr. Scriber said, have been held to different CBP screening equipment standards.

"There's no consistency on the Great Lakes," he said. "Cleveland was able to do what they've done because Customs gave them a break and let them have a period to equip themselves for all these standards. In Pennsylvania and New York, there is none. Here, it's like, 'You've got to build and do everything exactly according to our book the way we want it or you're not going to do containers.' It's different districts. Each Customs district has its own interpretation of what they want to do."

For example, Mr. Scriber said one recommendation is building mobile radiation monitors that would scan containers.

"That's just too costly for a port the size of Monroe and Oswego," he said. "We're sort of the same size. We could not do those sort of improvements with the low volume of containers that we would receive. It's frustrating."

Mr. Scriber said that mobile radiation monitors could be deployed by Customs to ports like Oswego.

"They have equipment that I could use for containers," he said. "The government already owns it, yet I can't get access. I have to buy my own."

Two years ago, Mr. Scriber spoke at a meeting of the American Association of Port Authorities.

"I advocated that Customs' regulations stunt growth of jobs and economic growth, both ways, import and export, on the Great Lakes," he said. "They add a huge cost to transportation that does not need to be there. The regulations they have are built on one size fits all, which is asinine. At the Great Lakes, we should have our own set of regulations that are both safe and economical."

The Port of Oswego, the first U.S. port of call and deep-water port on the Great Lakes from the St. Lawrence Seaway, has phase one completed on an intermodal yard — a facility designed for the loading and unloading of containers for movement on the railroad and subsequent movement on the street or highway.

"And we purchased a couple of container movers from the federal government in anticipation of having to do it in the future," Mr. Scriber said. "The only thing not there is the asphalt and the containers. Outside of that, we could be up and running in a month."

There would be less costs for shippers if the containers arrived in Oswego, Mr. Scriber said, because vessel owners wouldn't have to spend money for transport further west.

"We're unique because we're the first American port on the Great Lakes," he said. "This would be a huge advantage beyond Cleveland."

The Port of Cleveland contracted its Cleveland Europe Express service with Spliethoff in 2014.

"That was, and still is, the only container service on the Great Lakes," Mr. Gutheil said. "We charter the ship ourselves. We saw the need for container service on the Great Lakes. There were some shippers that for a long time supported the business. It's small. Compared to coastal ports, we're handling a few thousand containers a year."

The arrival of the Peyton Lynn C to the Port of Cleveland brings a new element to the business.

"This one is a container-only vessel," Mr. Gutheil said. "Whereas the ones we've been involved in since 2014 are multi-purpose vessels. They can handle containers and break bulk cargo."

On Aug. 29, the Marine Exchange of Southern California reported that 44 freight ships were stuck awaiting entry into California's two largest ports, the highest number recorded since the beginning of the COVID-19 pandemic. "The queue is a result of the labor shortage, COVID-19-related disruptions and holiday-buying surges," Business Insider reported.

"I think the Great Lakes needs to be viewed as a kind of a relief valve, so to speak, for a lot of the big coastal ports that are extremely congested, not very efficient right now," Mr. Gutheil said. "The problems moving containers through the big coastal ports now is becoming exacerbated by what's going on in the global supply chain."

In July, Sen. Peters wrote an op-ed in the Great Lakes Seaway Review. It said, in part: "The Great Lakes and the shipping industry they support are an economic engine for our entire region. Demand for e-commerce and other changes to supply chains have increased congestion at already busy sea ports along the east and west coasts. Heartland ports in the Great Lakes-St. Lawrence Seaway System offer a ready-made relief valve to alleviate some of this congestion."

John M. Peach, executive director of Save the River, a nonprofit designed to protect and preserve the ecological integrity of the Upper St. Lawrence River through advocacy, education, and research, said the idea of the Seaway becoming a container route has been kicked around for decades. Recently, he's noticed photos of container vessels being posted.

"But what's different now is these are ships really loaded with containers," he said. "Occasionally, you'd see one of the standard freighters with a couple of containers on them."

More ships in the system, he said, increase the risk for invasive species.

"It's new traffic coming through the Seaway and I understand that's economically important for the ports," Mr. Peach said. "But we have the same concerns that we've always had of the saltwater ships coming into the system, with ballast water exchange and the transport of invasive species."

The invasives that have left their detrimental mark in the St. Lawrence include zebra and quagga mussels, gobies and sea lampreys. But containers, Mr. Peach said, may bring new threats.

"Containers can bring in species that aren't necessarily aquatic species," he said. "They can bring in species of insects and other animals. They come out when they're unloaded."

He added, "It just raises my awareness of how important it is to continue to push for better ballast water legislation, enforcement and better equipment. Every time I see a new line of shipping come in, I say, 'We've got to raise concern again.'"

Shipping container facts, from PhilSpace:

n They were invented by American businessman Malcom McLean in the 1950s who sought a more efficient way of shipping items than the break-bulk style prevalent at the time.

n At any given time, about 20 million shipping containers are on ships.

n They have two standard sizes: 20 feet (20-foot Equivalent Unit) or 40 feet, which is two TEUs.

n A standard 20-foot container has a volume of 1,170 cubic feet.

n Each is assigned a unique digital unit number.

n About 97% of all shipping containers are made in China.

n They can last for 30 years.

n They can be repurposed, utilized as swimming pools, shops, clinics for disaster relief and instant classrooms. Outside of Mexico City, a small community of businesses housed in shipping containers has sprung up.

n It's estimated that only 2% to 10% of containers are inspected.

n Experts believe that 2,000 to 10,000 are lost annually. Some sink. Those that float remain just below the surface of the water, creating a possible hazard to vessels.

n It is estimated that a 20-foot container will float for up to 57 days, while a 40-foot one will sink after around 171 days.

Source: PhilSpace, Hampshire UK

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