Envisioning a central Port

During a recent strategic planning review, the Seaway Port Authority staff agreed that the most significant impact we could have on our region would be accomplished by the establishment and recognition of the Port as a major intermodal freight distribution center and international gateway for Midwest markets.

We concluded that one of the most important elements of our mission must be to keep Minnesota businesses globally competitive through the development of an integrated transportation system. Our success, in part, will be measured by the level of the Port's warehousing and trans-loading activity.

A port by definition and function is a regional distribution center. Truly effective ports not only handle major bulk commodities, but they are also capable of "bundling" cargoes to take advantage of cost-effective, multi-modal transportation services.

From its earliest days, Duluth has been poised to capitalize on its central position in North America. The North Star Port has always been seen as a major transit point, connecting the oceanic coasts while serving the U.S. and Canadian prairies.

Historically, the natural flow of commerce spawned profitable warehousing enterprises in Duluth. Marshall-Wells Hardware, as one example, used its geographic advantage — and the services of a dozen "package freight" lakers — to become one of the largest wholesale distributors in North America. Regrettably, Marshall-Wells lost its pre-eminent role to a Chicago company, just as Duluth lost its anticipated ascendancy into North America's transportation hub, a title also snatched away by Chicago.

So today we fight to regain our position as a key inland freight distribution center. It is again the regional geography and natural resources that will play significant roles in our quest. As a region, we are fortunate to have four major railroads, four key highway corridors, multiple pipelines, a world class runway and international airport and, of course, a major international waterway. We are also blessed with a trade area rich in natural resources that include iron ore and other minerals, coal, forests, agricultural commodities and Canadian oil and gas.

To better serve these industries, the Port is working with the State of Minnesota and others to develop essential "heavy haul" highway corridors. Extending the Port's competitive reach is critical to growth of the regional economy. Ultimately, this bolstered highway access will permit more industries and businesses to take advantage of the cleaner, more competitive services of our railroads and domestic, bi-national and international water carriers.

And what is today's vision? First, let's remove our glasses — at this point, perspective is far more important than clarity. That vision is of a vital business community taking full advantage of its geography and infrastructure by building on a fully integrated transportation system.

We are already seeing the development of major distribution and trans-loading activity within the pulp/paper and lumber industry. And we continue to look at expanding this niche through a centralized paper-pigment facility that would distribute imported clays from England and Brazil.

Further, we're reviewing the possible importation of farm fertilizer, a low-cost backhaul for the railroads and truckers that deliver our staple export, bulk grain. And while we will continue to be the entreport for the Canadian tar sands projects, major new pipelines and Midwest wind farms, we strive to better understand the future needs of regional industries and how we can build on their successes.

One example might involve a major steel pipe fabricator/distributor that could capitalize on our location in serving the international market. Vessels so engaged would also open opportunities for other regional manufacturers, including proposed ferrous and non-ferrous expansions on the Iron Range. (As a noteworthy aside, this year we expect 40-plus cargo-carrying ocean ships in search of outbound cargoes.)

Does our vision involve a major container distribution and reload center? Possibly, but that would require participation and buy-in by a major railroad and the realization by — or, perhaps, the education of — logistic managers that Duluth could truly be a major Midwest gateway. After all, we have the infrastructure, the land, Customs support and, most important, public support.

What remains is the development of the business case, no simple task. We must demonstrate improvements in transit time, capacity and reliability, plus we need to avoid artificial obstacles — such as the ill-conceived federal harbor maintenance tax — that tend to offset the values of a remote location. But as major population centers become ever more congested, the job may get easier. (Don't look now, but Chicago's congestion and notorious urban sprawl are steadily making Duluth more viable.)

And as the pendulum swings from rural to urban and back again to rural, it is all about timing, hard work, a little luck — and not being overwhelmed by mass and momentum.