The St. Lawrence Seaway, the waterway that links the Atlantic Ocean to the industrial heartlands of Canada and the United States, is continuing to buck headwinds, with current shipping trends showing little improvement this year from 2015. And the slower than anticipated beginning of the shipping season since late March has notably resulted in leading Canadian domestic carriers unable to operate at full fleet capacity.
“Overall tonnages are down in virtually all sectors,” Wayne Smith, senior vice-president, commercial of Algoma Central Corporation, which operates the largest Canadian-flag fleet of dry bulk carriers and product carriers, told AJOT.
He in particular alluded to the decline in iron ore shipments on the Great Lakes related to the difficulties of U.S. Steel in Hamilton, under creditor protection, and Essar Steel Algoma in Sault Ste. Marie, ON, under insolvency protection.
Smith was encouraged nevertheless by the recent firming up of steel prices in North America. Also, he foresaw a possible rebound of grain exports in the fall thanks to what looks like a promising harvest this summer in Western Canada.
In 2015, Seaway traffic fell by nearly 10% to 36 million metric tons due mainly to a marked drop in iron ore and coal shipments stemming from weakening demand in global commodity markets, especially China.
In the period between March 20 and end June of this year, total volume amounted to 9.9 million metric tons, down 7.7% over the same period in 2015. The dry bulk category was down 8% at 2.8 million tons despite strong growth in cement, potash and scrap metal. Iron ore was down 18% at 1.6 million tons, and coal was down almost 17%. Grain at 2.5 million tons was down nearly 11%.
While the general cargo category was down 8% at 832,000 tons, steel was up 108% and other general cargo was up 131%.
When the 2016 Seaway season opened following the winter closing, Terence Bowles, president and CEO of Canada’s St. Lawrence Seaway Management Corporation, suggested that the lower Canadian dollar could spur exports along with an increase of Canadian manufacturing activity and demand from the U.S. economy. But the hoped-for boost in Seaway tonnage has not yet materialized.
However, this past July, Betty Sutton, head of the Washington-based Saint Lawrence Seaway Development Corporation, offered a relatively optimistic assessment of the present outlook.
“Although the overall cargo numbers remain down, when compared to the same period last year,” she said, “we were above the five–year average. About 45 ships arrived from 19 different countries with high value cargo like windmill components, machinery, aluminum ingots, steel, sugar and general cargo. Prior to leaving the System, vessels loaded with export cargos that consisted of wheat, corn, soybeans, potash and general cargo loaded in containers.”