Grain shippers and farmers will be paying more to ship to send their products through the Great Lakes and St. Lawrence Seaway this season.
Tolls and charges on the seaway are 1.7 percent higher in 2005, while pilotage charges are up four to 20 percent in different sections of the seaway.
Combined cargo tolls for vessels passing through the Welland Canal and the Montreal-Lake Ontario sections of the seaway will total $1.23 a tonne, which works out to about $31,000 for a typical 25,000-tonne grain vessel.
Vessel charges of 24 cents a tonne will also be levied, along with lockage fees of $509.22 for each of the Welland Canal’s eight locks.
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Altogether those charges add up to about $42,000 for a vessel traversing the entire system from Thunder Bay to tidewater.
Pilotage charges, which are compulsory fees paid for pilots to guide vessels through tricky sections of the system, are also up this year.
Those fees have been raised four percent by the Laurentian Pilotage Authority, 5.5 percent by the Great Lakes Pilotage Authority and 20 percent by the U.S. Coast Guard, each of which provides pilotage in different parts of the system.
An official with the Canadian Shipowners Association says vessel operators want the federal government to review the entire pilotage system, saying it represents an unnecessary and unreasonable cost burden on shippers.
Shane Foreman, manager of policy and research for the association, said Canadian vessels operating in Canadian waters should be exempt from pilotage charges.
“If our crews and our vessels can meet certain standards, then we don’t think in most cases we need pilots,” he said. “It’s a substantial cost for us.”
An official with the Great Lakes Pilotage Authority defended its 5.5 percent rate hike, saying the agency had gone 10 or 11 years without increasing its fees until last year, at one point actually reducing its fees for three consecutive years.
A spokesperson for the U.S. Coast Guard said his agency’s 20 percent increase was the first since 2001. Under U.S. regulations, the rate is reviewed annually and subject to a full re-make every five years, with lots of opportunity for comment from affected parties.
“If you took a look at the rate of inflation over those years, that explains a good portion of the increase,” said Paul Wasserman.
Tim Heney, chief executive officer with the Thunder Bay Port Authority, said there’s no question the steady increase in tolls, fees and other charges has been a disincentive to using the eastern export route.
“A lot of the impact on our volumes has come from the government’s user-pay philosophy, which has driven seaway costs up,” he said.
The Lakehead has shipped an average of 6.13 million tonnes of grain a year over the past five years, with a 10-year high of 10.2 million tonnes in 1997. Shipments averaged 14.6 million tonnes in the 1980s, with an all-time record of 17.7 million tonnes in 1983.
Meanwhile, the 2005 grain shipping season got under way March 29, when the vessel Pineglen left Thunder Bay with 25,000 tonnes of canola destined for Windsor, Ont.
Heney said it looks like there will be a “bit of a spurt” to start the shipping season, although the longer-term outlook remains uncertain, dependent on the size, quality and marketing pattern of the 2005 crop. He said the port has been told to expect shipments totalling 500,000 tonnes in April and 450,000 tonnes in May.
Heney said port officials and workers are hoping for a good 2005 crop probably as much as prairie farmers.
“We’ve been cheated the last three or four years,” he said. “We’re overdue for a good year.”
An official with the Canadian Wheat Board said the agency expects to ship between one and two million tonnes of grain through the eastern system between now and the end of the crop year July 31, for a crop-year total of 3.5 to four million tonnes.
