Tariffs Open Up New Opportunities for Trade at Canada's Great Lakes Ports

 

Prior to both the pandemic lockdown and the more recent trade tariffs, there was potential to expand direct container ship transportation between European ports and American Great Lakes ports. While tariffs on European trade threaten to reduce the volume of European imports arriving at American Great Lakes ports, there is potential for the ships to include carrying trade between Europe and Upper Great Lakes Canadian ports.

Introduction

The construction and opening of the St. Lawrence Seaway during the late 1950s offered the promise of international trade arriving at and departing from ports located around the Great Lakes. Following the annual agricultural harvest season, bulk carrier ships carried American and Canadian farm produce to overseas markets. Ships that sailed to and from overseas ports and that carried general cargo, did call at several ports around the Great Lakes. As containers replaced crates and pallets carried aboard general cargo ships in trans-ocean sailing, container traffic to and from Great Lakes ports remained at minimal levels.

Beginning in 2014, the Port of Cleveland successfully negotiated with a European carrier to provide regularly scheduled container transportation between European ports and Cleveland. That initiative resulted in the Port of Monroe, MI, and Port of Duluth, MN, developing plans to connect to European–American container trade and expanding on the service offered at Port of Cleveland. However, trade tariffs recently imposed by President Trump that reduce the volume of trade between Europe and America also provide an opportunity to develop container transportation between Europe and Canadian ports on the Upper Great Lakes.

Canadian Ports

Several Canadian ports located along the St. Lawrence Seaway and around the Great Lakes are also located within close proximity to an international bridge crossing where customs inspection offices operate. A substantial volume of international container trade arrives by rail in the region of Canada bordered by Lakes Ontario, Erie, and Huron, with a population of over 5 million. There is potential for Canadian port management at the Port of Sarnia, Port of Windsor, Port Colborne and Port of Johnstown to develop container trade that involves ships equipped with onboard cranes to transfer containers on to trucks waiting at dockside.

The laden trucks would then proceed to a nearby Canada Customs Inspection Station to enter the customs arrival area in the same manner as trucks arriving from the USA.  

Combining Trade

Container ships sailing from overseas to any of the Port of Cleveland, Port of Monroe, or Port of Duluth will sail through the Welland Canal and pass within the width of two ships of the quaysides at Port Colborne. To assure viable sailing, the ship would need to carry a combined load of containers destined for both Port Colborne and any of the Ports of Cleveland, Monroe or Duluth. While Port Colborne does not presently transfer containers, there is a need for new development and general improvement of the surrounding area to assure future container transfer at that port.

Container ships sailing to Port of Duluth would pass by both the Port of Windsor and Port of Sarnia, where future container transfer from ship to truck would be possible involving ships equipped with onboard cranes. While the dock at Sarnia is within close proximity to the Canadian Customs Inspection area, there will be need to modify the road network at the customs area for trucks carrying containers from the dock would be directed to the arrival side of the customs area. Both Windsor and Port Colborne would need to address road access from port to Canadian customs offices.

Economics

To achieve future feasibility, ships would need to carry containers from Europe to both American and Canadian Great Lakes ports. Such operation would offset potential losses caused by American tariffs decreasing European trade entering America. Canadian authorities appear willing to expand trade between Canada and Europe, as well as other nations as American tariffs begin to impact international trade. The transfer of containers from ship to road transport at any of Port Colborne, Port of Windsor and Port of Sarnia reduces the over-capacity problem at rail – truck container transfer terminals located near Toronto.

While ships of up to 16,000 TEU sail into Port of Newark, ships that carry up to 4,000 TEU sail into the Port of Montreal and at slightly higher transportation cost per container on the trans-Atlantic voyage. Container ships of over 700 TEU that sail between Europe and the Great Lakes offer sufficiently competitive per container transportation rates upon arrival at Great Lakes ports, to warrant direct trans-Atlantic sailing of such small ships between Europe and the Great Lakes. The competitive rates arriving at the Port of Duluth extend to overland destinations beyond the port, in the USA and Canada.

Conclusions

American trade tariffs on European imports have the potential to undermine viable container ship operations between European and American Great Lakes ports. Such a prospect will require that in order to assure feasible ship operation, that container ships carry European trade to both American and Canadian ports located around the Upper Great Lakes. Canadian ports at Windsor, Sarnia and Port Colborne are located near long established Canadian Customs inspection offices. Container ships arriving at those Canadian ports will require onboard cranes to transfer containers to trucks that will then proceed to Canadian Customs Inspection offices.

The administration of the Port of Cleveland needs to be commended for having undertaken the initiative to develop regularly scheduled container ship operations between Europe and Cleveland. That initiative has provided opportunity for Port of Monroe and Port of Duluth to develop future container ship service. The American initiative has provided a basis to develop container ship service to Canadian Great Lakes ports as well, and the administrators of those ports now need to step up to the plate and develop container transfer operations.

Top image: The small port of Sarnia, Ontario on the east bank of the St. Claire River (Sentinel-2 / Copernicus / CC BY SA 4.0)