Great Lakes Dredging: Congressional Neglect Leads to Shipping Industry Crisis
10.8.2012 – Posted in E&B Alerts – Government Contracts
For decades, Congress has refused to allocate the necessary funding to maintain the Great Lakes shipping ports. “Years of inadequate funding for dredging have left an estimated 17-plus million cubic yards of sediment clogging the Great Lakes Navigation System. That total is expected to grow to 21 million cubic yards by 2015.”Dredging, overseen by the U.S. Army Corps of Engineers, helps maintain the waterway depths, allowing passage by larger and heavier cargo ships. The cost of restoring the Great Lakes ports and waterways to adequate levels after the years of neglect has ballooned to an estimated $200 million, funding that has been notably absent from congressional budgets.
The June flooding and torrential storms that pounded north-east Minnesota and north-west Wisconsin only served to exacerbate the crisis. From June 19 to July 8, the Superior Midwest Energy Terminal was shut down due to severe flooding that damaged loading equipment and facilities.
The Superior Midwest Energy Terminal is a “state-of-the-art transshipment facility [that] incorporates the economic advantages of both unit train receipt and ‘superlaker’ Great Lakes vessel shipment. . . .”[ii] According to Glen Nekvasil, vice president of the Lake Carriers’ Association, it “is the largest energy terminal on the Great Lakes. . . .”[iii]
The outage severely impacted coal shipping on the Great Lakes, exacerbating a multi-year downward trend of coal shipments. Even with the shut down, Superior Midwest Energy accounted for 46 percent of the 2.6 million tons of coal traded in June. As of July 9, the year-to-date coal trade was 8.9 million tons, 7.6 percent below the 9.6 million tons for the same time period one year ago. In the first half of 2012 “loadings [were] nearly 28 percent behind their 5-year average.” [iv]
The lack of dredging has significantly impacted the coal industry. “By the end of 2006, vessels loading cargo at Lake Superior ports were leaving as much as 8,000 tons of cargo behind each trip because of lack of adequate dredging in either the connecting channels . . . or the discharge port.”[v] “8,000 tons of coal produces enough electricity to power a metropolitan area the size of Greater Detroit for 3 hours.” Other effects on the economy include increased freight rates and shortfalls in raw materials that lead to lower factory production, which harms employment opportunities across multiple industries. The Great Lakes shipping industry alone creates “more than 103,000 jobs in the United States . . . .”[vi]
Organizations such as the Lake Carriers’ Association, the Seaway Taskforce Coalition, and the Great Lakes Maritime Task Force are all advocating for restoration of the funding necessary for adequate dredging. As a Midwest firm, and as attorneys with a focus in Admiralty and Maritime law, Eckland & Blando fully supports a vibrant shipping industry and local economy. If you have any questions about this, the Harbor Maintenance Trust Fund, or dredging contract opportunities, please contact maritime attorney Daniel J. Cragg at [email protected] , or visit us at www.ecklandblando.com and see our page on admiralty and maritime law.