Steel shipper wants lawmakers to dig deeper for Great Lakes dredge funds
A shipping manager of the largest U.S. integrated steel company wants Capitol Hill lawmakers to seriously consider the impact on U.S. exports if the federal government remains unable to sufficiently deepen shipping channels and harbor berths in the Great Lakes.
'The Great Lakes link the iron ore and stone from the North with coal to the South,' said Daniel J. Cornillie, manager of marine and raw material logistics, for ArcelorMittal USA at Indiana Harbor, to attendees of the Great Lakes Maritime Task Force meeting in Washington Wednesday.
'It requires approximately 26 million tons per year of lake-delivered raw materials to sustain ArcelorMittal's production and jobs in just its U.S. lakes mills. That is approximately 3,000 tons of material per hour, 24/7,' Cornillie said. 'Without Great Lakes shipping to deliver these materials, these mills would not be there.'
Despite the cost and environmental benefits of Great Lakes transportation, lack of dredging means U.S.-flag lakes vessels are unable to maximize their loads.
'Twenty years ago our time chartered Joseph L. Block, for example, was carrying summertime loads of approximately 41,000 net tons. Last summer, on the same runs, she carried less than 35,000. She has to make six trips to deliver what she did in five,' Cornillie said. 'This math is being repeated across the U.S.-flag lakes fleet that delivered over 100 million tons last year.
'The constraint is the draft available, and the culprit is deferred dredging in the context of low lake levels,' he said. 'With the current fleet at full utilization, this is forcing cargo to other modes of transportation at a multiple of fuel consumption.'
'The dredging crisis and falling water levels really made a mockery of Great Lakes shipping and the benefits it was supposed to provide in 2007,' said Patrick J. O'Hern, president of the Great Lakes Maritime Task Force and vice president and general manager of Bay Shipbuilding Co. in Sturgeon Bay, Wis. 'Vessels designed to carry more than 70,000 tons of cargo each trip routinely forfeited 6,000 tons of iron ore or coal. By the end of the year, with water levels in their seasonal decline, some ships were losing more than 10,000 tons of cargo.'
The task force estimated that the losses at more than $700 million per year for U.S.-flag vessel operators and raw materials suppliers on the Great Lakes due to the lighter loads.
Congress and the administration approved nearly $140 million for lakes dredging in 2008. However, the administration's proposed budget for 2009 requests only $89.3 million, a decrease of $49 million, or 35.5 percent.
The task force has said the budget reduction 'flies in the face of reality.' The Army Corps of Engineers, which is responsible for dredging the nation's ports and harbors, acknowledged that it needs more than $230 million to clear the backlog of dredging projects throughout the Great Lakes navigation system.
'The good news is that the funding is available,' O'Hern said. 'The Harbor Maintenance Trust Fund's surplus has ballooned to more than $4.1 billion. That surplus is the result of a tax collected on waterborne commerce. It's time to put the trust back in the Harbor Maintenance Trust Fund.'
The task force applauded Rep. Stephanie Tubbs Jones, D-Ohio, for recently introducing a bill that proposes a harbor maintenance tax program focused on Great Lakes shipping maintenance needs. She was also credited for co-sponsoring legislation to revive ferry services on the Great Lakes.
'The current erosion of the value of the dollar provides an opportunity for American manufacturers and the American workforce by decreasing the competitiveness of imports and raising that of our exports,' Cornillie said. 'But it also provides a warning. What will the future look like if we let our manufacturing job base wither due to lack of infrastructure investment?
'Our trading partners across the Pacific are racing past us in this regard,' he said. 'Continued decline in the dollar based on a chronic balance of payments deficit will make it very difficult and expensive for us to compete in the world market for resources. All of us are getting lessons on that at the pump.' ' Chris Gillis