Reflecting the slowing economy of the United States, tonnage declined on most of the Great Lakes during the 2007-08 shipping season. The U.S.-flagged fleet was down 5.1 percent for the year, and the total Seaway tonnage was off by 9.1 percent. The decline can be linked to several factors, among them 1.) lower water levels that reduced vessel productivity and 2.) a slowing in the construction market that lowered demand for both steel and aggregate.

On the western end of Lake Superior, though, there is good news. We are bucking the trends. In our harbor, the quiet efficiency of our shipping and port companies and workers sometimes masks the dramatic level of activity taking place. While other ports have seen declines, the Port of Duluth-Superior actually saw a tonnage increase this season of more than 800,000 tons, and we have seen major improvements to Port infrastructure, too. Port tonnage not only increased this year, but continues a four-year growth trend. That’s a trend we hope to sustain.

Export wheat was the outstanding performer for us during the 2007-08 shipping season. Total grain shipments increased by 42 percent, or 950,000 tons, totaling 3,178,848 tons by year end.

As has been widely reported, poor wheat harvests around the globe, from Australia to Europe, created a profitable market for grain traders in Duluth-Superior. The result was a surge in grain export beginning in late July and extending right through to the end of the shipping season.

In addition to the traditional movement of coal and iron ore pellets for the domestic market this year, we saw the testing of new international markets.

To the surprise of many, we exported Minnesota iron ore to Algeria and China. Almost 1.5 million tons of iron ore pellets were exported during the season through the St. Lawrence Seaway. Ore was moved to Quebec on Seaway-size vessels and then transferred on water to Panamax-size vessels for the international leg of the voyage. This was the second consecutive year we played a key role in the export of iron ore pellets.

Project cargoes, including wind turbines (for both export and import), and specialty mechanical components for the Canadian oil sands development also increased in ’07-08. These unique cargoes require special handling skills and heavy-lift equipment that few ports have anywhere in the world.

Our port’s outstanding ability to efficiently handle specialty cargoes and essential bulk commodities continues to produce both jobs and wealth for the entire region.

Overall vessel arrivals for 2007-08 were up by 44 visits, split evenly between overseas ships and U.S.- and Canadian-flagged vessels. Unfortunately, much of the increase in vessel traffic was necessary to address reduced vessel capacity due to low water levels in the system. Thankfully, near-record low water levels on Lake Superior in September jumped by six inches due to rain in October. However, Lake Michigan and Lake Huron continued to approach record low levels by the end of the year. This was also true for the St. Mary’s River. Channel depth continues to be a serious threat to overall system productivity.

What is on the horizon for 2008? If our national economic slowdown does not become a recession, port tonnage could increase again this season.

Underlying our projections is the assumption that the U.S./Canadian laker fleet can provide sufficient capacity to handle increased tonnage. However, low water levels, and the possible four-month delayed sailing of the 1,000-footer, Walter J. McCarthy, which was damaged while berthing for winter layup, could leave cargo on the dock by the time the next shipping season ends. Yet we are hopeful.

Our two principal commodities for growth in 2008 are coal and iron ore. Coal shipments are forecast to be up by more than a million tons this year, and with full production and strong demand for iron ore continuing, we should see an increase of 800,000 tons of pellets from the famed Minnesota Iron Range. We could see a friendly race for greatest growth here — and “may the best commodity win!”

Because worldwide wheat reserves remain at record lows, export grain levels are likely to match last year’s shipments (if North American production levels can continue). Project cargo is also expected to be a substantial contributor in 2008. Ships are already booked for additional wind turbine and Canadian oil sands cargoes.

Currently, vessel ocean rates are down 30 percent from record high levels last season. Lower freight rates could help both the steel import and grain export businesses. This is important because both are major drivers of international trade, and all this can only be good for traffic at the Port of Duluth-Superior.

The bottom line for 2008 is that we are on track for another year of growth. We could see tonnage levels at the Port of Duluth-Superior this year not seen since 1957. As you look out across our seemingly quiet harbor this shipping season, remember that looks can be deceiving. This is a busy port — and one of the most efficient and productive in the U.S.