City could benefit if shipping project sails in Nova Scotia

5/4/2008

A proposed container port on the Nova Scotia coast could hold a key to Toledo's future as a potential ocean-container distribution center.

Representatives of Melford International Terminal Inc., a Canadian company that has obtained 315 waterfront acres along the Strait of Canso, met last week with Ohio Gov. Ted Strickland to outline their proposal for a deepwater container port that is intended to capitalize on North America's growing trade with Asia, which is resulting in congestion at existing ports on both the Atlantic and Pacific coasts.

While the Melford proposal anticipates that a majority of the freight handled there would make the inland portion of its journey by rail, Terry Johnson, Jr., administrator of the St. Lawrence Seaway Development Corp., said the port could become a relay point for smaller container vessels that would transport freight between Nova Scotia and Ohio via the St. Lawrence Seaway and Great Lakes.

"There is the potential for waterborne inland distribution," Mr. Johnson, who accompanied the Melford delegation to Columbus, said. Ohio is "a natural distribution point," with about one-third of the cargo Melford anticipates handling destined to points within a one-day truck haul from northern Ohio.

"It almost seems tailored for Toledo to become a major stakeholder and beneficiary," said James Hartung, president of the Toledo-Lucas County Port Authority.

"There's the potential for a very direct, real application of the short-sea shipping concept," Mr. Hartung said, referring to the notion of using smaller ships or tug-barge combinations to link inland and coastal ports.

It's far from a certainty, though.

Container-hauling capability into the Great Lakes is generally confined to deck placement on bulk-cargo freighters. Mega-ships that dominate the trans-ocean container trade are far too large for the St. Lawrence Seaway and are growing even larger.

Even without those obstacles, the seaway's wintertime shutdown, which typically runs from Christmas until late March, discourages potential shippers who prefer to avoid making seasonal supply-chain adjustments.

Consequently, container activity at Great Lakes ports is "very limited," meaning that containerized consumer goods, imported auto parts, and other high-value cargo to or from the Midwest must ride trucks or trains from or to coastal ports.

But ships of sizes suitable for seaway navigation currently haul containerized freight on European rivers and could be built for North American operations if the economics worked out, Mr. Johnson said.

Melford officials could not be reached for comment after the meeting Wednesday with Governor Strickland, other state officials, and U.S. Rep. Marcy Kaptur (D., Toledo).

But information the company has prepared about its project describes a $300 million facility, intended to be funded entirely by private investment, that will be capable of handling not only the largest container ships now in use but even bigger vessels designed but not yet built.

Project planners hope to be in operation by 2010 and have an initial capacity to handle 1.5 million TEUs - an industry measurement of container capacity - annually. The largest container ships now in use have capacities of between 10,000 and 12,000 TEUs.

"Once unloaded at the Melford Terminal, the containers will be transshipped principally by rail," the company's summary states. "Over time, short sea shipping opportunities will be created whereby smaller feeder vessels will be used to serve ports in Canada and the eastern United States."

Mr. Johnson said costs for developing container-handling port facilities in Ohio should be minimal since Melford International Terminal plans to screen all containers upon arrival. According to its plan, Melford would provide on-site security suitable for U.S. Department of Homeland Security preclearance for connecting shipments, whether by ship or rail.

While acknowledging rail's primacy for handling inland transport from Melford, Mr. Hartung said that if even 20 percent of the freight went through the seaway, it could be a "wonderful opportunity" for Toledo.

A seaway-size vessel probably could carry between 700 and 800 TEUs - less than a tenth the capacity of ocean-going ships, Mr. Hartung said. But those would be "boxes now targeted to specific markets" and potentially enough to allow Cleveland and Toledo to pursue such shipments cooperatively, rather than trying to compete with each other for it, he said.

Keith Dailey, a spokesman for Mr. Strickland, said the governor was impressed by the Melford presentation.

"Several Ohio ports have the potential to benefit from this," Mr. Dailey said. "The governor is always interested in efforts to improve Ohio's economy, especially if they're in logistics and distribution."

"This is all about Toledo's taking advantage of its position at a crossroads," agreed Steve Fought, a spokesman for Miss Kaptur. "It's been talked about for decades. It's time that we acted on it. Creative minds in economic development have to scramble now and put together a package that meets their [Melford's] needs."

Mr. Hartung added that even if no short-sea shipping aspect to the Melford terminal developed, Toledo is well-positioned to capture rail shipments from the Nova Scotia port.

Rail service to the Melford area is provided by a local railroad company that links directly to the Canadian National Railway, whose network includes a line into Toledo. No other southern Lake Erie city has single-carrier rail service from eastern Canada.

Access to Canadian National rails was a cornerstone of a rail container terminal proposed in Monroe County two years ago that was dropped after local landowner opposition arose and a rift developed between the terminal's proposed operator and developers working on the project.

Canadian National's direct access to the Pacific was touted at the time as a key reason for siting that project in Monroe County, but its eastern Canada access could be just as advantageous, Mr. Hartung said. Efforts to identify a potential site for such a rail terminal continue, he said.

Contact David Patch at:

dpatch@theblade.com

or 419-724-6094.