Once capable of moving 10 million tons of grain on the water annually, the local Port Authority explains how market adjustments have made for a modern capacity that continues to have untold reach.
Earlier this summer, a reader wrote in wondering how there could be such a disparity between grain shipments in Thunder Bay, where grain was flowing through the Ontario port at a hefty 30% uptick over last year, and the Twin Ports, which the reader considered to be underperforming.
So, the News Tribune looked into the situation.
The first thing the Duluth Seaway Port Authority said, via spokesperson Jayson Hron, was that it was “disinclined” to explain it as an us-versus-them situation.
“There are so many factors that affect grain movement and grain markets,” said Hron, who turned the explanation over to Kate Ferguson, the Port Authority’s director of trade and business development.
Ferguson was quick to note that grain shipments out of Duluth were up this year 21.8% over the five-year average, and even 5.8% over 2019.
“That’s a good sign; we’re very busy on vessel movement,” Ferguson said.
Earlier this month, the Chamber of Marine Commerce, located in Ottawa, credited worldwide demand for grain and grain shipments with helping to buoy the industry during a pandemic that has caused shipments of coal, ore and other cargoes to decline.
Ferguson noted something about grains that doesn’t get talked about often: Lots of grain moving through the port of Duluth-Superior’s giant grain elevators leaves by the trainload, shipped to a domestic miller.
“The amount of through-put that happens — what we would call train-to-train with storage time in between — that tonnage is not counted in the port and is not as visible to the everyday person as vessels loading at their berth,” Ferguson said.
The grain terminals in Duluth are all privately held and the Port Authority only collects data on what’s shipped by water. Ferguson guessed the tonnage that leaves Duluth by rail is significant, but said she couldn’t put a finger on it.
Another indicator of heavy grain movement is that Canadian National Railway announced last week in Montreal it was planning to order 1,500 new grain hopper cars. The company said the new rail cars would encourage economic recovery and meet the growing needs of grain farmers and customers.
“We are confident in the future of the grain business and its key role in CN’s long-term growth,” President and Chief Executive Officer J.J. Ruest said in a news release.
The new high-capacity cars are expected for delivery by January and are the company’s second such order in the last two years. Ruest also noted that Canadian grain movements continue to break records, month after month.
“By investing in the construction of these new cars, we want to help quickly stimulate the North American economy by supporting manufacturing- and agriculture-related jobs,” he said.
With a healthy grain industry, Ferguson took time to share a history of the market locally.
During the 1950s with the opening of the Great Lakes-St. Lawrence Seaway System, and the arrival of the United States’ Food for Peace Program, which exported surpluses to needy countries, Duluth-Superior began to seed its grain heyday. By 1960, it saw 4 million tons shipped annually, climbing to more than 10 million tons by the 1970s.
Then things changed. The catchment area shrunk. Ferguson compared it to a watershed for the way it gave boundary to the grains that flowed into the Twin Ports. What is now North and South Dakota, Montana, Wisconsin and Minnesota, had once been a larger area, stretching all the way to Colorado. But global competition for grains grew strong and started pulling products in different directions. Railroads began to send more and more grains to the West Coast for shipments to the Far East.
Soybeans, which used to flow through the Twin Ports, now typically get on a train and move west. Duluth-Superior has been left to specialize in mostly durum wheat, canola, flax and sugar beet pulp pellets.
“The other bit of competition we have here in the port of Duluth-Superior is the Mississippi River,” Ferguson said. “We don’t really think about the Mississippi River often, but the Mississippi really provides another gateway for all the same grains that go through here to go the Gulf of Mexico to be put on vessels for shipment on the water.”
Big picture, Ferguson said tonnage slippage through the years in Duluth-Superior was a good thing for the agriculture industry.
“The best thing we can do for the ag market is to give them opportunities and gateways to ship their products at the least amount of cost,” she said.
One final note on local grain movement: The advent earlier this decade of Duluth Cargo Connect, the port’s synchronized marketing brand, and the construction and arrival in 2017 of the CN Intermodal Terminal on Rice’s Point has renewed Duluth’s involvement in specialty grains by moving them in containerized volumes.
Soybeans with special traits used in making tofu and feed grains, which are lesser quality grains, move that way.
“Tofu is very white,” Ferguson said, “and you wouldn’t want a dark-colored soybean.”
So, the total tonnage of grains in Duluth-Superior may look as if it’s lagging against historical highs, or when compared to neighboring ports. But that’s not necessarily the case.
“I’ll make one more point about containers,” Ferguson said. “We’re best at serving markets in Europe and North Africa for the way the port pops out onto the Atlantic Ocean. But the great thing about containers is all of a sudden we get to play in the West Coast market — now that we have a containerized option on the table.”
- More than 400 million tons of grain have transited the port (on water) since the Duluth ship canal’s opening in 1871.
- The port eclipsed 1 million short tons of grain for the first time in 1891 (1,031,177).
- It eclipsed 2 million short tons for the first time in 1898.
- Grain shipments in 1944 reached a record 105 million bushels. In 1945, that jumped to 171 million bushels, a record that would remain into the early age of the Seaway.
- The Seaway opening in 1959 sent grain totals consistently over the 4 million short tons threshold, beginning in 1960. In 1973, the port eclipsed 10 million short tons in a single season for the first time. The all-time high for grain tonnage occurred in 1978 (10,171,188 short tons).
- The first grain elevator opened in the port of Duluth-Superior in 1871. It was called Elevator A. Early sailing vessels from the 1800s and combined passenger/freight steamships lifted only 200 or 300 tons of grain as their complete cargoes. Today, that amount of grain is loaded in minutes, and a ship can carry more than 23 million short tons of grain.
- The St. Lawrence Seaway’s opening in 1959 ushered in a new era for the Port of Duluth-Superior, making it Mid-America’s world port. It opened global markets for farmers and producers throughout a vast catchment area stretching all the way to the Rocky Mountains.
- The first oceangoing vessel to arrive in Duluth after the Seaway’s opening — the Ramon de Larrinaga — stopped initially at Duluth’s Peavey Grain Elevator to load oats before boarding barley from Cargill.
Source: Duluth News Tribune