Great Lakes vessel operators, shippers seek second large icebreaker for U.S. Coast Guard.
When winter sweeps across the vast Great Lakes region, Dan Cornillie prepares for the worst.
As manager of marine and raw materials logistics for ArcelorMittal USA—one of the largest integrated steel manufacturers in the United States—he knows well that the Great Lakes is the lifeline to raw materials that keep the company’s massive furnaces running and its production humming. Heavy ice can bring his supply chain, as well as those of numerous other companies lining the Great Lakes basin, to a sudden halt.
“Winter happens every year, but we don’t know how bad it will be and how long it will last,” Cornillie said in an interview. “The way we prepare for it, obviously, is to build inventories. It’s the name of the game.”
To make steel requires three main ingredients – iron ore, coking coal and limestone – and lots of it for plants the size ArcelorMittal’s. The company’s three U.S. integrated mills at Indiana Harbor, Burns Harbor, and Cleveland can use upwards of 60,000 short tons of iron ore per day. Most of the ore comes from mines scattered around the northern and western rim of the Great Lakes and large quantities are most efficiently transported by vessels steaming directly to the company’s docks.
ArcelorMittal is not alone in its supply chain methodology. There are about a dozen other U.S. and Canadian steel manufacturers along the shores of the Great Lakes maintaining similar transportation arrangements.
The region’s power plants also count on vessels to transport coal in vast quantities year around to maintain their large-scale electric-power production capabilities.
When the Soo Locks close between Jan. 16 and March 24, iron ore shipments still continue to load on vessels at Escanaba, Mich., through late January and often into early February. The cement trade on the lower Lakes often resumes around March 1 and iron ore shipments on Lake Michigan and Lake Erie restart shortly thereafter. Demand for U.S.-flag cargoes during periods of ice cover can reach as much as 20 million tons, according to the Cleveland-based Lake Carriers’ Association.
“About 15 to 20 percent of Great Lakes cargo gets moved around during the seasonality of the ice,” said Mark Barker, president of Interlake Steamship Co., based in Middleburg Heights, Ohio. “We must work as hard as we can to move all the tons that we can.”
However, when temperatures plummet below 32 degrees Fahrenheit, large swaths of the Great Lakes can freeze thick within 24 to 48 hours, closing up harbors and stopping vessels in their tracks.
Vessel operators, such as Interlake Steamship, often use the period when the Soo Locks close—traditionally at the height of the ice formation—to place their vessels in maintenance. “It’s not worth putting our vessels in harm’s way,” Barker said.
Last winter on the Great Lakes was considered one of the severest in terms of icing in more than a generation. The ice that forms on the Lakes’ surface can be three-to-four feet thick. “Windrows” (slabs of broken ice piled on top of each other by the wind) can reach heights of 10 to 12 feet.
The winter of 2013/2014 was so bad, in fact, that cargo moving on U.S.-flag Great Lakes vessels between Dec. 1, 2013 and May 30, 2014 fell nearly 7 million tons compared to the same period in 2012/2013. While ArcelorMittal had enough stockpiled materials to push through the winter, some power plants were within days of burning through their remaining coal reserves. The limestone trade essentially stopped during the winter months and didn’t resume in earnest until late April.
It’s estimated that last winter cost the economy about $700 million and nearly 4,000 jobs.
“Make no mistake about it, some economic activity was lost forever because of the difficulties in keeping the shipping lanes open,” said James H.I. Weakley, president of the Lake Carriers’ Association, in a statement. “Steel that had been ordered was not made, which means either some products were not produced or made with foreign steel. Worse yet, some North American products were outright replaced with imports.”
The Lake Carriers’ Association, which represents 17 American companies that operate 56 U.S.-flag vessels on the Great Lakes, noted its members last winter suffered upwards of $6 million in damage to their ships from the ice while trying to supply their customers.
Rail is also not a cost-effective transportation alternative for many mills and power plants along the Great Lakes, and some of these operations lack rail access altogether. The Army Corps of Engineers estimates that Great Lakes marine transport annually saves shippers $3.6 billion compared to the next least costly transport mode, which is rail.
Currently, the nation’s Class I railroads are struggling to efficiently disperse railcar capacity to their existing shippers in need of this transport. “The cost of new rolling stock and rail connections could only be justified by long-term contracts, not by spot market moves to fill a temporary gap in deliveries,” such as during the winter months on the Great Lakes, Weakley said.
The Lake Carriers’ Association said it’s imperative that the Coast Guard has additional icebreaking capabilities to keep Great Lakes harbors and shipping channels open to cargo vessels throughout the winter months. One way to do this is by adding a second heavy icebreaker.
The Coast Guard commissioned its newest heavy icebreaker, Mackinaw, in Marinette, Wis., on April 2, 2005, and brought it into service on the Great Lakes in December that year. The Mackinaw replaced an icebreaker of the same name launched in 1944.
The Coast Guard operates a total of nine icebreakers on the Lakes. However, one of the vessels is currently undergoing modernization at the agency’s yard in Baltimore and is not available for this winter.
With the exception of the Mackinaw, the other icebreakers are smaller—about 140 feet in length—and six of them must still undergo life extensions during the remainder of the decade to continue in service. The 140-foot-long icebreakers are also limited to daytime operations due to their ability to support only a single crew, whereas the Mackinaw can support two crews onboard to provide round-the-clock icebreaking services when necessary.
However, last winter’s ice was even a challenge for the Mackinaw. When a convoy of iron ore vessels led by the Coast Guard’s giant icebreaker, assisted by two of its 140-footers, departed Duluth/Superior for Gary, Ind., on March 26, they fought their way through the thick ice.
“Under normal circumstances, the voyage should have taken about 62 hours. Instead it stretched out 11 days,” Lake Carriers’ Association spokesman Glen Nekvasil said. “One ore boat was damaged severely enough by ice that the Mackinaw had to take it back to Duluth/Superior to get repaired.”
It’s not uncommon for both the U.S. and Canadian coast guards to work together on Great Lakes icebreaking operations during the height of the winter, but even Canada is under pressure to modernize its icebreaking fleet.
“At a minimum, Congress must authorize construction of a twin to the Mackinaw, so we can have two high-powered American icebreakers on the Lakes,” Weakley said.
Cornillie of ArcelorMittal USA agreed. “Two Mackinaws should be the minimum. What happens if the one Mackinaw we have now should break down?” he said.
This article was published in the February 2015 issue of American Shipper.
