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Sunday, 12 May 2013 22:00

Low water levels causing problems for Great Lakes shipping

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Harbor communities across the Great Lakes Basin are grappling with how they keep their harbors open given the record-low water levels. While federally recognized commercial harbors are maintained by the federal government, recreational harbors such as Saugatuck, shown here, are left to foot the bill. Harbor communities across the Great Lakes Basin are grappling with how they keep their harbors open given the record-low water levels. While federally recognized commercial harbors are maintained by the federal government, recreational harbors such as Saugatuck, shown here, are left to foot the bill. FILE PHOTO: PHOTOGRAPHY PLUS

Thanks to a combination of natural and political headwinds, the Great Lakes shipping industry is bracing itself for another season of rough sailing.

The industry’s headaches can all be tied to persistently low water levels across the Great Lakes, challenges exacerbated by continued political wrangling over the funding of dredging projects to keep harbors open and accessible for both commercial and recreational users.

After one of the wettest Aprils on record for many parts of West Michigan, forecasters expect the water levels to rise about 6 inches on Lake Michigan. However, even that increase may not be enough to quell fears of stuck vessels and higher costs for many companies, industry insiders told MiBiz.

The reason: To be able to make it through shallower harbors, Great Lakes freighters have been forced to light-load their cargo, which reduces ships’ efficiency and adds costs. In the high waters of the late-1990s, the largest coal-carrying vessel to pass through the Soo Locks was able to navigate while laden with 71,000 tons of cargo, but as of December 2012, that capacity was reduced to 62,000 tons, according to the Lake Carriers’ Association, a shipping industry group out of Rocky River, Ohio.

For each inch the water level goes down, cargo ships have to carry between 50 tons and 270 tons less in freight, according to Glen Nekvasil, vice president of the Lake Carriers Association. Currently, vessels carrying coal must haul about 10,000 tons less per trip.

That’s led to a cost increase for companies relying on large vessels for transporting goods. Companies that contract for space on a vessel are having to pay for that capacity even though the vessel can’t be fully loaded, said Ron Matthews, president of Verplank Dock Co. in Ferrysburg.

The process — known as “dead freight” — has customers paying for space they can’t use.

“If you have a 21-foot harbor, it’s to the point where you can only load for 19.6 feet,” Matthews said.

One of the harbors where the situation is the most pronounced is in St. Joseph in Southwest Michigan. The commercial harbor is normally dredged to a depth of 23 feet, but the channel, which is currently choked with silt, is only 16 feet deep, said Thomas O’Bryan, area engineer for the U.S. Army Corps of Engineers based in Grand Haven.

At that depth, St. Joseph has been all but closed to commercial traffic until dredging is completed sometime this month, he said. The harbor usually gets between 250,000 tons and 400,000 tons of freight per year, including construction materials such as cement and aggregates.

“Obviously, it’s much more economical to (ship) it by freighter coming into the harbor than trucking from some farther destination,” O’Bryan said.

Those economics of shipping by water get pinched by the low lake levels, according to industry experts. And while it’s not uncommon for water levels to fluctuate significantly during the springtime, research data from the National Oceanic and Atmospheric Administration (NOAA) suggest the problems associated with shallow harbors could be getting worse.

NOAA data clearly show Great Lakes water levels move in natural cycles. But since 1996, the water levels have been in a sharp decline, a drop that most affects Lakes Michigan and Huron, which are classified as one body of water because of their connection at the Straits of Mackinac.

Drew Gronewold, a hydrologist with NOAA’s Great Lakes Environmental Research Laboratory in Muskegon, said in a recent call with media that the lake has been below its long-term average since the late-1990s. He said the levels dropped by about a meter over two years, mostly because of regional changes in precipitation and evaporation.

Current water levels on Lake Michigan are at or near record lows — the January level set a new record low about 2.5 feet below the long-term historical average — and are forecast to be at about the same level as last year, according to the Corps of Engineers’ April projections.

The low levels have put harbor dredging in the spotlight. If commercial traffic is to continue in ports like St. Joseph and others along West Michigan, they will need to be dredged.

“We can’t rely on Mother Nature,” said Nekvasil of the Lake Carriers’ Association. “We have to dredge.”

Across the Great Lakes Basin, the Corps of Engineers received $31.0 million in 2013 for dredging projects in 15 commercial harbors. The Corps committed nearly $400,000 in funding to dredge the St. Joseph harbor.

All the dredging activity has been a boon for one Holland-based marine contractor, King Co., which has secured dredging contracts for nearly $1.46 million this year for projects, including Grand Haven, Holland, Muskegon and St. Joseph, according to the Corps of Engineers.

But the price tag to have open, navigable harbors is worth it, Nekvasil said, especially in Michigan because its shipping season is limited each year by the winter closure of the Soo Locks.

Another worry for Great Lakes commercial shipping companies is whether the federal government will continue to fund dredging projects. In February, Sen. Carl Levin (D-Mich.) introduced legislation “to ensure that amounts credited to the Harbor Maintenance Trust Fund are used for harbor maintenance.”

“For too long, harbors in the Great Lakes and across the country have suffered from a maintenance backlog, while at the same time we’ve been spending only a portion of the available money in the Harbor Maintenance Trust Fund,” Levin said in a statement.

Levin’s bill is in reaction to the Realize America’s Maritime Promise Act (RAMP), which MiBiz wrote about last August. Under that bill, Congress only “recommended” that federal dollars appropriated for harbor maintenance be used for their intended purpose. This bill aims to make it binding.

Thirty-seven U.S. Senators co-signed the bill, which has considerable support in the House. Currently, SB 218 is in committee.

The Harbor Maintenance Trust Fund only provides dredging funds to federally authorized harbors receiving more than 1 million cubic tons of cargo per year or for those harbors that service a power plant. That leaves communities with smaller harbors looking for other options.

To that end, the Michigan Legislature weighed in with a bill sponsored by State Sen. Goeff Hansen (R-Hart) to address funding for dredging activity. The bill has passed both the House and the state Senate. It aims to give autonomy to local governments to do “waterfront improvement activities,” including dredging. As of press time, the bill had not yet been signed by Gov. Rick Snyder, but most sources expected him to sign it.

While some communities may be waiting for the state to help fund dredging, still others are taking action now. In late April, members of the Mona Lake Improvement Board solicited donations from residents to dredge the recreational channel that connects Mona Lake to Lake Michigan.

Bob Skolnik, a Mona Lake resident and Muskegon County Commissioner representing Norton Shores and Fruitport, told MiBiz that the channel will be dredged to five feet deep and 20 feet wide, which will make it easier for recreational boats to access Lake Michigan. He said this is the first time in 14 years the channel has been dredged. It is expected to cost more than $120,000.

“There’s no big money benefit,” Skolnik said, “but for property owners, I think it enhances our property value.”

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