Monday, April 16, 2007

Lower Great Lake Water Levels Affect Shipping

By Emily Fredrix - the Associated Press

When Fred Shusterich looks around the harbor on Lake Superior, he sees things he hasn't seen in years -- little islands poking out of the water.

Like many others connected to the shipping industry, Shusterich -- president of the coal supplier Midwest Energy Resources -- is concerned about the significance of those islands off the city of Superior in far northern Wisconsin.

"I think it may be another very poor year if this drought continues, as far as water levels," he said.

Now's the time when harbors along the Great Lakes -- Superior, Michigan, Huron, Ontario and Erie -- have thawed and shipping begins, carrying 10 percent of the country's waterborne cargo.

But excitement over the shipping season is being displaced by frustration over low water levels, which is forcing shippers to lighten their loads so they can move safely into harbors.

The lighter loads -- sometimes hundreds of tons per ship -- turn into headaches for suppliers that send their goods on vessels, shippers, and companies whose orders come up short.

Midwest Energy Resources, Shusterich's company, just sent out its first vessel of the season with a load just under 60,000 tons; a typical load is 62,000 tons, he said. He said the company will use more ships to carry cargo, and use rail and trucks when it can.

"When we're running at the levels we're running, it means you need more vessels to carry the same amount of cargo," he said. "But at some point you run out of vessels."

Shippers don't expect the situation to improve soon. A lack of ice cover on the lakes during the winter led to more evaporation. And they say the federal government can't keep up with the dredging of sand, silt and other debris from the harbors' bottoms -- a process that doesn't solve the problem of low water levels but does give ships room to carry more weight.

For every inch the lakes recede, ships must reduce their loads between 50 and 270 tons, said Glen Nekvasil, spokesman for the Lake Carriers' Association, a trade group for Great Lakes shippers.

At the end of last season, with waters particularly low on Lake Superior, ships lost about 8,000 tons per trip -- about 11 percent of their carrying capacity, he said.

"Every ton has an impact. These companies, they earn their living carrying cargo, so every lost ton of cargo is lost revenue," Nekvasil said.

Shipping is big business. Last year, a little more than 1 billion tons of goods such as iron ore, coal and limestone were waterborne in the U.S., he said. Shippers on the Great Lakes hauled 110 million tons of cargo, more than half of that iron ore.

In the late 1990s, shippers hauled as much as 125 million tons of cargo a year on the Great Lakes. Last year's numbers are at least partially due to the low water levels, but the steel industry -- which uses iron ore -- has been slow, too, Nekvasil said. The coal trade has been steady and the roughly 70 ships in the U.S. fleet sail regularly, he said.

Water levels have dropped for years, and the forecast isn't getting any better....

Grain exporter Chicago and Illinois River Marketing isn't waiting for the government to dredge its harbor in Milwaukee. Richard Blaylock, manager at the company's site, said the company spent $200,000 in two years to dredge its own spot off the Milwaukee Harbor...

The dwindling water levels mean a typical vessel carrying between 25,000 and 30,000 tons will have to reduce its load by 1,000 tons per trip, he said.

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