The making (and expanding) of an emerging break bulk Port

The Port of Duluth/Superior enjoys an international reputation as one of North America’s leading bulk cargo ports.

But it is the generation and retention of break bulk cargo that commands the lion’s share of our time and energy at the Duluth Seaway Port Authority. As the 18th largest tonnage port in the U.S. (45.6 million net tons), the Port is primarily known as a dry bulk port, encompassing 49 miles of commercial waterfront. We have 26 docks, most of them privately owned, and we are served by four major railroads (BNSF, UP, CP and CN). Our Port is the largest shipper of iron ore and coal in the U.S. and also is the Great Lakes’ largest shipper of grain.

In the 1870s, this natural harbor, formed by the St. Louis River, attracted the railroads, warehouses, grain elevators, coal docks and shipyards that gave a developing city its commercial underpinnings. In the 1890s came the discovery of Minnesota iron ore. That ore catapulted the Port into national prominence, but it was the completion of the St. Lawrence Seaway in 1959 that opened Duluth to direct trade with nations around the world.

The St. Lawrence Seaway reaches into the North American heartland through a system of 16 locks, achieving an elevation of 601 feet above sea level in Lake Superior. A voyage from Duluth to northern Europe takes less than 14 days. Almost half of the trip is consumed between Duluth and the Atlantic Ocean.

The Great Lakes are surrounded by 100 million people in two Canadian Provinces and eight U.S. states that represent 60 percent and 40 percent respectively of the Canadian and U.S. industrial capacity. The Seaway System was rationalized and built to import eastern Canadian iron ore and international steel to this industrial heartland and to export U.S. and Canadian grains.

It was the Seaway that led directly to the creation of most Great Lakes’ port authorities, including Duluth’s. The shippers, receivers and carriers of the big-volume domestic bulk cargoes have nearly always done their own marketing and built and operated their own facilities on their own properties. The port authorities, then, were created to construct new infrastructure and develop overseas trade.

For 40 years, our Seaway focus was steel and iron ore inbound and grain and Food for Peace (under Public Law 480) outbound. While steel, iron ore and grain are still the mainstays of international maritime traffic, legislative changes to PL 480 had all but eliminated the Great Lakes from the U.S. Food Aid Program. The result: hundreds of longshoremen throughout the Great Lakes were put out of work.

It may not be classified as the perfect storm, but three distinct forces came together in the 1990s to significantly influence Duluth’s future: labor, ship size and project cargo.

A new terminal operator, Lake Superior Warehousing, was contracted in 1991 to operate the Port Authority-owned Public Marine Terminal. The new operator immediately challenged the work practices and inefficiencies of the local ILA regime. It took two sometimes-tumultuous years, but a new contract was ultimately signed with a new ILA local that resulted in less contention and an immediate and significant productivity improvement.

The work force is currently empowered to, simply, get the job done. The members are skilled, innovative and receptive to new ideas and best practices. We now claim one of the best work forces in the country.

Because Duluth is 2,300 miles from the Atlantic Ocean, with 16 locks and seven pilotage districts, vessel productivity is critical. In the last few years we have seen a sharp increase in small (8,000 to 12,000 ton) European Coastal Traders. These recently built, highly automated ships with eight- to 10-man crews have significantly less operating cost than conventional vessels.

Their open, square box holds and movable bulkheads make them ideal for a combination of cargos. In the grain trade, the ability of these ships to create small compartments is well suited to specialty grains and small tonnage customers. This ship type has opened new markets from an eight-meter Seaway System to eight-meter international ports.

The result has been to minimize, if not eliminate, additional handling costs for centralized distribution and to drastically shrink landside delivery costs. In many cases, the cargo is delivered directly to the user located on shallow-draft secondary water channels.

In simple terms, cargo that once moved through Rotterdam, Hamburg and Antwerp is now being handled at ports like Greenore, Ireland; La Coruna, Spain; Jorf Lasfar Morocco; Ravenna, Italy, and Delfzijl, Netherlands.

Lastly, comes the high art of project cargos, where smaller ships deliver overweight and oversized machinery for U.S. and Canadian destinations in North America’s mid-continent.

In Duluth, a combination of highly productive longshoreman working alongside highly skilled union iron workers and operating engineers handle some of the largest cargos moved anywhere. Working as one team, they move cargo almost flawlessly through well engineered plans. The on-budget and on-time seamless movement from ship to customer has branded Duluth as a premier heavy lift port.

In 2005, Duluth moved the single largest piece of machinery in North American rail history 1,400 miles to the Canadian oil sands at Fort McMurray, Alberta. This single piece, loaded on a special Krupp-designed Schnabel railcar, stretched over 300 feet in length, measured 19 feet by 14 feet 3 inches and weighed 805 net tons.

Moreover, this car was preceded to Fort McMurray by a train of 61 multi-axle cars representing the single longest train of heavy lifts ever moved by a Class I Railroad.

The Canadian oil sands expansion and development program is expected to continue for at least 15 years with a total capital construction cost estimated at $150 billion. With an anticipated tripling of current oil production, we also hope to participate in the pipeline construction that is under way to support these projects.

Having already established a major rail corridor to the oil sands, we are now working with the Minnesota Department of Transportation for the creation of a high, wide and heavy corridor to Manitoba for the movement by truck of ever larger modules to further support the oil expansion.

With today’s high energy costs comes an increased demand for renewable wind energy. Last year we unloaded five ships of turbines for GE and Vestas. This year we handled three shiploads of 2.3 megawatt turbines for Siemens. With several large laydown areas, we have the capability to handle many more. For our labor force, the discharge of these large and delicate cargos has become routine. An entire shipload of wind turbines is unloaded in three days.

Our ultimate objective is to take advantage of these numerous specialty ships once they are empty in the Great Lakes and to load them with exports of high value cargo other than, or in addition to, grain. Cargo consolidation is becoming more prevalent and scheduled liner service closer to a reality.

For ports like Duluth to enjoy increasing success, strong customer relations and value-added service must be provided for each and every cargo. Large or small, a port must treat each customer as an integral contributor to its success. The port and its operators must work closely with each customer through the planning, execution and debriefing phases of a project. Challenges must be viewed as opportunities to showcase resources and abilities, not as barriers or obstacles.

The Great Lakes is at a tipping point for general cargo as landside congestion and delays push cargo ever closer to the end user. Construction modules are increasingly wider, longer, heavier. In a global economy, plant expansions require equipment to be reverse engineered to the largest sizes possible to take advantage of modular onsite construction and low cost international sourcing.

For the Great Lakes St. Lawrence Seaway, a rising tide truly lifts all boats. For inland ports, it is essential that a ship is loaded in both directions. A ship entering the Great Lakes with steel generally unloads at several ports to minimize landside transportation. As an example, a ship will unload steel in Hamilton, Ontario; Cleveland, Ohio; and Detroit, Michigan; and then sail to Duluth or any other port in the Great Lakes System to load. Therefore all the Ports are linked to each other’s success.

As a result, 18 ports on the Seaway system have banded together to jointly market the waterway through our Highway H2O campaign. As a marketing brand, H2O clearly and concisely captures the very essence of the marine highway. In other words, the 18 ports are the on and off ramps for a vast network of roadways and rail lines providing complete door-to-door service.