The global economic storm could produce choppy waters on the St. Lawrence Seaway this year.
However, after declining sharply in 2008, grain shipments could turn out to be a bright spot.
Bruce Hodgson, director of market development for the St. Lawrence Seaway Management Corp., said the global economic collapse has created uncertainty about 2009.
“We expect next year to be a challenge,” he said, adding it’s difficult to make projections at this point.
As a result of the economic uncertainty around the world, the seaway’s customers are having trouble forecasting their own business operations for the coming year.
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That in turn makes it difficult for the seaway to know what to expect in terms of cargo volumes.
“As we get into February and March, closer to the opening of navigation, we’ll start to get a better idea,” said Hodgson, adding that one commodity seems to be in a better position than others to weather the storm.
“Our best estimates are that grain will probably remain at similar levels as last year,” he said, reflecting a bigger prairie crop and continued strong global demand for food.
A repeat of last year’s performance may not be the best possible news, given that grain traffic was down by 27 percent in 2008.
That decline was the main factor in an overall reduction of five percent in seaway traffic as 40.71 million tonnes of cargo were shipped through the 3,700 kilometre inland waterway system, down from 43.01 million tonnes in 2007.
Included in that was 7.57 million tonnes of grain, down 27 percent from the previous year’s 10.41 million tonnes.
Imports of steel slabs were also down in 2008, while other commodities such as iron ore, coal and general cargo were relatively unchanged.
The seaway did generate new business in 2008, including wind turbines and new bulk commodities, and Hodgson expected that to continue in the year ahead, with a special 20 percent discount on tolls for new shippers.
Tolls will be frozen in 2009, the second year of a three-year freeze designed to provide planning stability for shippers and ensure the seaway is competitive with other trade gateways into the Great Lakes region.
Those include rail to and from east coast ports and rail combined with barge traffic on the Mississippi River.
Grain is subject to tolls of $1.30 per tonne, about $32,500 for a typical 25,000 tonne vessel. Other fees boost the total cost to $40,000.
One positive factor in recent months has been the sharp decline in ocean freight rates.
When rates are high, vessel operators focus on ocean-based movement to capitalize on those rates, leaving seaway shippers scrambling for vessels.
“But with the changes going on in global markets and freight rates declining so much, we think that might present some opportunities,” Hodgson said.
The 2009 shipping season will open with a special ceremony at the St. Lambert lock near Montreal in March, marking the waterway’s 50th year of operation.
