Low Great Lakes water levels costing shippers millions
'At some point you're going to have to pass it along to the end receiver of your product,' port authority says
Record low water levels on the Great Lakes are costing the shipping industry and economy millions of dollars each year, say insiders.
Jack Frye, vice president of Southwestern Sales, which operates two shipping terminals in Windsor, Ont., estimates the low levels cost shipping companies $20,000 per freighter, or $500 million a year, in lost revenue.
Ed Dewling, captain of the Algoma Enterprise and a captain for 30 years, just passed through the Detroit River loaded with petroleum coke. His 222-metre freighter, which has a 24,494-tonne capacity cap, was running 907 tonnes light.
"We're running light all the time now," Dewling said.
Water levels are down because warmer air and water temperatures accelerate evaporation and the region hasn't been getting as much rain or snow in recent years.
Al Vanagas, senior vice-president of technical operations at Sterling Fuel on the banks of the Detroit River, says the low levels cost everyone, not just shippers.
"It drives the cost of buying product up when you're an end user or shipping cargo because you can't ship as much as you used to," he said.
Dewling refused to say how much of the 907 tonnes he couldn't haul this trip cost the company. But he called it "significant."
The cost of fuel and number of crew members remain constant. So fixed costs never change, he said.
"At some point you're going to have to pass it along to the end receiver of your product," said David Cree, head of the Windsor Port Authority.
Shipping cheaper than trucking, industry says
Every year, the port authority receives tonnes of aggregate, used in road construction in regions outside Windsor.
"You have to look around the entire province and [at] the costs municipalities are going to be paying for road work if the cost of moving product around by water gets more expensive," Cree said. "That's going to affect the cost of those products."
Vanagas, though, says water levels have to drop several more metres before shipping costs more than ground transportation.
Dewling said his freighter needs only 30 centimetres of clearance to navigate the channels from Lake Huron to Lake Erie.
He has to slow down in shallower water to remain safe.
"The deeper the water, the better she handles, though," he said.
Water retention structures urged
Saad Jasim, former director of the International Joint Commission in Windsor, said people should take note of the levels sooner rather than later.
"Civilization starts around the water sources. So we have to maintain our water sources," he said. "We need to look at the challenges that are facing us and not wait until it becomes a major problem."
The International Joint Commission, which regulates shared water uses and recommends solutions to problems on shared waterways, is urging both Canada and the U.S. to consider installing water retention structures to boost lake levels.
Frye suggested something similar.
"If I was to suggest something, I would suggest strategically located weirs, built out of stone, so it would retard the water from flowing as fast down the Great Lakes, rising the waters. But again, it would have to be strategically placed, and [require] approval of both the Canadian and American governments," he said. "The natural solution, of course, is more rain."