The St. Lawrence Seaway was created to help large ocean ships sail to the Great Lakes. During the time period when The St. Lawrence Seaway was created, there was a container terminal at The Port of Chicago that helped connect metropolitan areas with The Great Lakes. Over the next 10 years, large vessels carried containers along the seaway until the ships became too large. This lead to an expansion in maritime. Trains started carrying containers through railway terminals. During this time period, river barge transport was cost competitive. Long voyages through The Panama Canal involved lower per container transportation costs than the overland journey across long railway trains.
The recent opening of container transshipment terminals in the Western Mediterranean region for large container ships impacts smaller ships sailing across the North Atlantic. Ships that arrive at Western Mediterranean ports are larger than the ships that sail through the Panama Canal. Seaway container ships head through ports throughout The US and Canada.
The Cleveland precedent carries containers across The North Atlantic. There are also multiple navigation locks that go through the St. Lawrence Seaway to Lake Erie. The economic performance of The Cleveland precedent over the next year will determine future maritime service to ports in Chicago and Toronto. The Cleveland precedent could result in faster delivery times involving transferring containers to the railways at The Port of Long Beach.
While The Port of Shanghai is a further distance away from The Suez Canal than The Panama Canal, the ship offers lower per container transportation costs than a neo-Panamax ship. The primary delivery schedule for North American retail is between March and December. Ports on The Western Mediterranean coast offer transshipment to Seaway-max ships and the option of competitive container costs from ports in Shantou, Manila, and Kuala Lumpur.
During this era of large container ships sailing the ocean, the combination of ship and railway transportation causes higher transportation rates. Seaway ships sailing from Western Mediterranean terminals only cover a small part of the sailing distance from Asian ports. The Seaway and Great Lakes service has the potential to lower transportation rates throughout Asia.
Potential Trade Tariffs
U.S. President Donald Trump’s trade tariffs may take some of the container trade from the railway to the waterways in an effort to lower transportation costs. An increase in trade tariffs would increase the price of numerous consumer goods at American retail and department stores. One method to remain cost competitive would involve reducing per container transportation from Asia. Container ships may start carrying an increased number of containers. Some ships are looking at carrying smaller volumes of trade through the longest part of the voyage. They would use small vessels to help with the rest.
There are size restrictions for vessels that sail the waterway between Quebec City and The Great Lakes. Removing the engine would increase the payload. The layout would help with trans-North Atlantic sailing.
—Jacques Piccard, Managing Director of Davenport Laroche