Minnesota’s Port On ‘Hwy H2O’

Port of Duluth-Superior was a major grain trade focus in the 1980s. Market shifts have cut the lake trade volume as market supply and demand has shifted.

 

The Port of Duluth-Superior continues as an important shipping hub for Minnesota, Wisconsin and surrounding states. It is most famous for 740-foot so-called “handymax” ships that are a good fit for hauling grain to the seaport destinations in Europe and northern Africa. Photo taken in 2011 at Duluth, Minn. (Duluth Port Authority photo by Robert Welton)

 

DULUTH, Minn. — In 1985, the Port of Duluth-Superior was the key focus of grain exports from the Upper Midwest, and the first cover story when Agweek magazine debuted.

The Aug. 5, 1985, first issue of Agweek magazine, carried the headline: “Twin Ports: A slow year for grain sales,” and a companion story, “Foreign buyers misunderstand U.S. standards for grain quality.” Reed Karaim, assistant editor for Agweek took a special interest in the Federal Danube, a Belgian-registered ship at then-Harvest States No 2 port elevator, with photos by Agweek photographer Ken Kleven.

Karaim then described the grain handling and the “laker” ships, which ply Lake Superior — “the deepest, largest and probably stormiest body of fresh water in the world.”

There’s a lot of history at Duluth. More than 400 million tons of grain have been shipped since they started keeping records in 1871.

 

Kate Ferguson is director of trade and business development for the Duluth Seaway Port Authority, which supports shipping activities and growth on both sides of the state line in Minnesota and Wisconsin. 2020 file photo. (Courtesy Duluth Port Authority)

 

Kate Ferguson, director of trade and business development for the Duluth Seaway Port Authority, which supports both sides of the border, said port records indicate that the port in 1985 shipped 3 million tons of ag products, of which about 65% was for export.

The product mix was diverse — sunflower seed, corn, wheat, millet, barley and beans.

 

The Port of Duluth-Superior peaked on grain shipments in the 1970s but is still important as a wheat export facility to European and northern African markets, and domestically. Photo taken at Duluth, Minn. Photo courtesy of Duluth Port Authority / Agweek

 

In 2019, the port loaded 1.5 million tons of ag products, of which 73% was for export. Today, the products are primarily wheat, some canola as well as sugar beet pellets. Europe and northern Africa are likely destinations.

Departing ships destined for domestic destinations can be longer, up to 1,004 feet long and 105 feet wide. Anything for export is smaller — up to 740 feet long, 78 feet wide — because it must go through the Soo Locks at Sault Ste. Marie, Mich.

Ron Johnson, who retired in 2016 as Port Authority trade development director, notes that the port in the 1940s had been dubbed the “Pride of the Inland Seas,” and that the Great Lakes were seen as one of America’s national security gems, and could be again. It is still the system’s No. 1 port by tonnage and one of the nation’s top 20.

 

A Gavilon grain ship makes its way through the Port of Duluth-Superior in 2018. The need for shipping grain from the facility shifts with circumstances but some see it as important for national security. Photo taken in October 2018, at Duluth, Minn. Photo courtesy the Duluth Port Authority, Dennis O’Hara-northernimages.com / Agweek

 

“Many overseas markets prefer smaller ships because of port constraints,” Ferguson says. The Great Lakes system is a “truly binational” effort between the U.S. and Canada.

“We market the system as ‘Hwy H2O,’” Ferguson said, of U.S. and Canadian management entities. The system 2,300 miles in the system that offers shippers “direct access to the commercial, industrial and agricultural heartland of North America” — including 40 ports with key intermodal connections.

There have been recent innovations, including “hands-free mooring,” of ships through key points, eliminating some of the mechanical requirements that some vessels weren’t equipped for. In the past, the seaway could accommodate only a small percentage of the world’s ships of the smaller “handymax” size, but now can handle the majority.

 

Always changing

 

Wheat and durum are primary crops shipped through the Port of Duluth-Superior, but it is also important for sugar beet pulp pellets for cattle feed. Photo taken at Duluth, Minn. Photo courtesy of Duluth Port Authority / Agweek

 

 

Duluth first exceeded 1 million tons of grain in 1891 and quickly hit 2 million tons in 1898. Milestones came with record shipments in 1944 and 1945

Shipping jumped after 1959 when the St. Lawrence Seaway opened, and the port handled 3 million tons. The first ocean-going vessel arrived at the Peavey Grain Elevator, loading oats to load oats, and then barley from Cargill.

In 1960, Charles B. Green, then-vice president of the F.H. Peavey & Company and general manager of the Globe Elevator division, said Duluth then was lesser only to 12-month ports at New Orleans.

In the 1950s and 1960s, the Duluth port was a major player in Public Law-480 “Food for Peace” shipments to the world, which served humanitarian aid but was criticized as being too heavily about surplus liquidation.

Port movements increased sharply after the great Russian “great grain robbery” in July 1972 — where the Soviet government suddenly and unexpectedly increased grain imports, leading to a decade of high prices and production. The port hit its all-time record of nearly 10.2 million tons in 1978.

 

The Port of Duluth-Superior ships out about 27% of the volume in ag commodities via ship as it did 35 years ago, although the port has become bigger as a train shipping terminal and intermodal site for container shipping of identity-preserved and specialty crops. Photo taken at Duluth, Minn., in 2011. Duluth Port Authority photo by Robert Welton / Agweek

 

Totals have declined since then. Ag shipments peaked at 6.36 million tons per year in the 1970s then declined 13% to 5.5 million tons per year in the 1980s. Then it dropped by 15% to 4.7 million tons in the 1990s; followed by declines of 38% to 2.9 million tons from 2000 to 2009; and another 48% drop to 1.5 million tons per year from 2010 to 2019.

Among the reasons for the decline in grain shipments are foreign competitors on wheat production, including the Russians and European countries. European buyers eschew genetically-modified organism grains. Railroads have become sharper, moving high-volume rail transportation in “unit” trains and “shuttle” train rates to ports in the Pacific Northwest, and the Gulf Coast.

 

Tomorrow’s promise

 

The Port of Duluth-Superior has been shipping northern grain since the 1870s. Photo taken circa 1940, is of Consolidated Elevator Company’s elevators B, C, D and G. Courtesy University of Minnesota-Duluth / Agweek

 

Today, up to 900 vessels and 35 million tons of cargo move through the Port of Duluth-Superior every year —both in and out. Duluth-Superior is still the Great Lakes’ largest-tonnage port and one of the nation’s top 20. It supports 8,000 jobs and contributes $1.4 billion in business revenue to the regional economy.

In 2019, grain accounted for 4.4% of the tonnage total at Duluth.

Iron ore is the port’s tonnage leader, at 59% of total shipments in 2019. Other movements are coal, 24%, as well as limestone and salt.

The port also handles so-called “break bulk” (general cargo too big for a shipping container) and ”heavy-lift cargo,” including wind energy equipment and cargoes for industrial projects. (In 2019, Duluth Cargo Connect set a single-season record 306,000 freight tons of wind energy components to the Clure Public Marine Terminal.)

In the current shipping season, through June 30, Ferguson said the grain tonnage through the ports was 21.8% above the five-season average for the period, and 5.8% more than the same period in the 2019 shipping seasons. The 2019 wheat shipments was 20% over 2018, and a 12% improvement on the five-season average.

 

Brian Sorenson, a director at the Northern Crops Institute based in Fargo, N.D., says the Port of Duluth-Superior remains important for hard red spring wheat and durum shipments from North Dakota, Minnesota, and surrounding states. Photo taken July 20, 2020, at Fisher, Minn.

 

Brian Sorenson is a program director for the Northern Crops Institute in Fargo, N.D., a multi-state entity in the business of promoting northern-grown crops to the world.

“It’s a very important port for our durum exports, but as things go along, there is always market shifting,” Sorenson said. “Over time, we could see an increase in throughput at the port for our crops out of this region.”

The northern Great Plains states are still strong in wheat exports, but now most wheat goes through Pacific Northwest ports — often to eastern Asian markets. China has bought little wheat from the U.S. in the past few years, so recent tariff trade disputes have done little to the wheat market.

 

Intermodal action

More of the port’s facilities are used for “rail-to-rail transfer,” where the grain comes into their facilities, goes into storage and later is moved by rail elsewhere in the country.

Many markets are demanding identity-preserved, non-GMO products, Ferguson said.

In 2017, Canadian National Railway opened its CN Duluth Intermodal Terminal at Duluth. The facility is one of fixtures of the Clure Public Marine Terminal, a partnership between the seaway authority and Lake Superior Warehousing.

The intermodal terminal connects the region to containerized imports and exports via a high-capacity rail network that spans the continent, including the East, West and Gulf Coast ports.

This partnership between CN and Duluth Cargo Connect opens up a congestion-free logistics supply chain that moves freight by its shortest, most economical path.

“Intermodal is young, it’s growing,” Ferguson said, noting they’re working with agricultural producers and shippers in a “catchment area” — a trade area — of North Dakota, northeast South Dakota, northern Minnesota, Wisconsin and even Michigan.

“We can now access those specialty crop producers, and transfer small lots of grain to international markets,” Ferguson said.

 

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Source: Ag Week