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The Globe and Mail

Great Lakes shipping industry to inject $500-million into infrastructure

Greg Wight, CEO of Algoma Central Corp., with his newest, and biggest, ship in their fleet, Equinox.

Peter Power/The Globe and Mail

The Great Lakes shipping industry is launching a major upgrade, buoyed by an improving economy.

Operators of the route that connects the heart of North America with the Atlantic Ocean and the world are embarking on an ambitious program designed to capitalize on free trade with Europe and rebounding U.S. business.

To help meet rising demand for exports, the Great Lakes and St. Lawrence Seaway system is spending $500-million over the next four years to rebuild lock walls and gates and automate the system of 15 locks that connect the eastern Great Lakes with the St. Lawrence River. In addition, the shipping companies that move an array of industrial and agricultural goods are investing a combined $1-billion in new ships that are larger and more efficient.

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"Manufacturing is picking up. Construction is picking up. So that should help exports," said Terence Bowles, chief executive officer of St. Lawrence Seaway Management Corp. The company and its U.S. counterpart manage the 3,700-kilometre water route that runs from the Atlantic Ocean, up the St. Lawrence and through the Great Lakes.

As a carrier of grain, iron ore, construction equipment, building materials and petroleum products, the 100-port seaway is an economic barometer.

Cargo volumes plunged in the recession of 2008 as factories slowed and consumer spending dropped, but activity has since rebounded to 37 million tonnes, a quarter of which begins or ends at an international port. Mr. Bowles is hoping for 40 million tonnes this year, he said in an interview from Cornwall, Ont.

Lately, ships have been bringing raw steel material from Europe to feed Toronto's condominium boom. And the massive grain crop in Western Canada will ensure the same ships sail east with their holds full of wheat and canola bound for terminals at Montreal and Quebec City before being loaded into ocean-going vessels for Europe and Africa.

"We're not just rebuilding the locks and infrastructure, we're also introducing new technology to make the waterways more efficient, more safe and more reliable," Mr. Bowles said.

The seaway and its engineers went to Australia for the upgrade's centrepiece. There, massive ore ships are moored to the docks using vacuum pads. Seaway engineers adapted the devices to work their locks, saving labour and increasing safety for workers while securing ships as they move to a water body with a different level.

Hands-free mooring, as it is called, should also increase traffic by allowing a greater variety of ships to travel the locks system without the need for seaway-specific wires or lines, which are prone to breaking, said Mr. Bowles. He said the move is being closely watched by operators of the Panama canal and other major routes.

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Shipping company Algoma Central Corp. is spending $300-million on six Chinese-made bulk carriers, hoping to capitalize on the rise in cargo volumes with faster, larger and more efficient vessels. It will also manage another two bought by grain company CWB, said Algoma Central's CEO Greg Wight.

One of these, the Algoma Equinox, will be the first ship of the 2014 season to pass through the Welland Canal, which connects Lake Ontario with Lake Erie, on Friday.mar. 28. In its first season, the Equinox will sail between ports along the Quebec shore and Thunder Bay. Ore for ArcelorMittal's Hamilton steel plant will move west. Grain from Thunder Bay will move east along the route that opened in 1959.

Extreme cold and ice over much of the Great Lakes delayed the Equinox's first voyage by a week.

The Canadian Coast Guard's ice breaking ships have been clearing paths through the St. Lawrence for about a week. Two smaller U.S. ice breakers were expected to reach Thunder Bay port this week. On Wednesday, ice in the Thunder Bay harbour was about three to four feet thick, about a foot thicker than usual. That might be too much for the small breakers, but will be simple work for the larger ships such as Canadian breaker Pierre Radisson, which is expected by this weekend, said Tim Heney, CEO of the port. The first cargo ship is due to arrive on April 2, a week later than last year.

"Generally we always have an ice breaker [for the harbour]. That's not unusual," he said. "What is unusual is the amount of ice throughout the whole system."

Lake Superior iced over this year, something that has not happened in 30 or 40 years. A convoy of ships was scheduled to leave Duluth, Minn., this weekend, led by an ice breaker. An ice cover remained on Thursday.

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