Shipments steady at port, but competitive challenges loom

2013-08-18T00:00:00Z Shipments steady at port, but competitive challenges loomJoseph S. Pete joseph.pete@nwi.com, (219) 933-3316 nwitimes.com

PORTAGE | International trade through the St. Lawrence Seaway and the Great Lakes supports more than 48,300 jobs in Indiana, the most of any Midwestern state, according to a recent study.

But the trade route faces competitive challenges, including high ship-piloting costs and longer transit times than it takes for a barge to chug up the Mississippi River.

Officials discussed the state of local shipping at a Port of Indiana board meeting in Portage Thursday. The Port of Indiana-Burns Harbor remains a popular destination for lake freighters on a route that generates $14.1 billion in annual salary and wages, and $33.5 billion in business revenue.

Tonnage shipped through the Great Lakes rose last year to 38.9 million tons on a climb back toward pre-recession levels. The amount of cargo is down by 12 percent so far this year, though it could be boosted by a good fall harvest in the United States, said Rebecca Spruill, director of trade development for the St. Lawrence Seaway Development Corp.

Shipping company Fednav Group, which does the stevedoring at the Burns Harbor port, will no longer get shipments for the BP Whiting Refinery expansion when that project wraps up at the end of the year, and also recently lost business from ThyssenKrupp Steel, said Paul Gourdeau, senior vice president for Fednav.

The steelmaker used to ship coil into the Northwest Indiana deep water port but can no longer find any buyers at local mills. Wind turbine shipment prospects also have dried up.

But overall, shipments have been steady this year at Burns Harbor and may even increase a few percentage points, Gourdeau said. Brewery tanks and vats for a local brewer are bound for the port this fall.

Despite the steady business, the Montreal-based company recently moved a crane out of Burns Harbor to a new port.

"We're not disinvesting in Burns Harbor," he said. "It's just a strategic decision."

Fednav continues to invest in the port, Gourdeau said. The company has recently added a large forklift truck, specialized lifting gear and a new video system to monitor the cargo.

The company also is buying up new ships since shipbuilding costs have dropped to a fraction of what they were five years ago. Fednav historically had owned 15 to 20 ships and leased the rest, but is building up its fleet with cash purchases because the financial crisis had made getting financing difficult.

Fednav expects to own 52 ships by 2016, Gourdeau said. The new ships are more fuel-efficient and can save the company up to $4,000 a day in fuel costs. But piloting costs in the Great Lakes remain huge, up to $120,000 for a round trip and double that if two pilots are required.

"The cost pressure is huge," he said. "We have to find ways to be more productive or otherwise we won't survive."

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