Port of Cleveland’s new operator could pump up volume

By: Jay Miller


The Cleveland-Cuyahoga County Port Authority will start the upcoming shipping season with a new general cargo handler.

Montreal-based Logistec Corp. will become exclusive marine terminal operator as of April 1. Port Authority officials believe Logistec will help expand the Port of Cleveland’s cargo handling operations.

Since 2017, Logistec has operated the 45-acre Cleveland Bulk Terminal (CBT) on Whiskey Island west of the mouth of the Cuyahoga River, which receives iron ore and limestone coming from the Upper Great Lakes. From there, the material heads upriver by shortline railroad or smaller ships, much of it to the Arcelor Mittal steel mill.

At the time, David Gutheil, the Port Authority’s chief commercial officer, told Crain’s that the Port Authority was looking for a partner whose primary business was cargo handling. Until that time, the CBT was managed by the Carmeuse Group, a Belgian mining company that purchased the Oglebay Norton Co., the longtime operator, in 2008. Oglebay Norton was a 150-year-old Cleveland company that mined limestone in Michigan, in addition to managing the CBT.

Now, Logistec will operate the docks and warehouses of the general cargo terminal on the east side of the river. It replaces longtime operator Federal Marine Terminals Inc., a subsidiary of Fednav Ltd., a Montreal shipping firm.

Unlike Fednav or Carmeuse, marine shipping is Logistec’s main business. It operates in 37 ports on the U.S. Gulf Coast and in Canada. The local port is its first foray onto the U.S. side of the Great Lakes.

“It was a natural relationship,” said Jade Davis, the Port Authority’s vice president for external affairs, in an interview at the port’s office at the foot of West Ninth Street, overlooking the docks. “They had a beachhead here (at CBT), and we wanted a company that was very aggressive in getting new cargo.”

Low-end commodity steel in coils and plates produced in Europe has been the primary freight of ships dropping cargo at the lakefront docks. The port also receives what the industry calls project and break-bulk cargo. Project cargo is high-value equipment or components, while break-bulk cargo is boxes, bags or barrels shipped on pallets.

The Port Authority also has built a modest container shipping business, called the Cleveland-Europe Express, and when firms drill for oil and gas in Eastern Ohio it has been a staging site for oil and gas piping.

At a Port Authority board of directors meeting on March 7, Port Authority and Logistec officials laid out a plan to expand the reach of the port by seeking to encourage shippers in southern Ohio, western Pennsylvania and Indiana to export or import through the Cleveland port.

In a phone interview, Frank Vannelli, a senior vice president of Logistec Stevedoring, the company’s dock managing business, said the company came to respect the work of the Port Authority staff in its two years of operating the CBT and to believe it can build the volume of cargo handled at the Cleveland port.

“When you look at the anchor cargo there now, several hundred thousand tons of (imported) steel to begin your program with is phenomenal,” he said.”Off of that, you can build by going out and creating business opportunities by looking at the other commodities you can bring to and from that location. That’s the intrigue in Cleveland. It’s very strategic (for Logistec) to be on the U.S. side of the Great Lakes.”

In an earlier email, Vannelli said Logistec was planning to set up a facility for processing break-bulk cargo that can be delivered by truck or rail to final destinations.

Vannelli also wrote that his company sees an opportunity to attract shippers of commodities that are transported in what he called “heavy-lift jumbo bags.” Heavy-lift bags are used to ship flowable products such as chemicals, fertilizers and pigment solids. The company also sees an opportunity to export more finished steel.

Cargo volumes were down at the Port of Cleveland in 2018 from a year earlier, an outcome foreseen by Port Authority president and CEO William Friedman as the shipping season began last year and the Trump administration started imposing tariffs, especially on Canada, a major trading partner.

Both Logistec and the Port Authority see an opportunity for the Port of Cleveland to be a base for imported wind-turbine components.

“We’re very much trying to set ourselves apart in the wind energy business, especially with the Leedco project hanging out there,” said Davis, referring to the six-turbine wind trial the Lake Erie Energy Development Corp. is planning for offshore in Lake Erie. “And also getting more outbound steel going through our port. We still make a lot of stuff in Ohio.”

Leedco’s project, called Icebreaker Wind, is awaiting approval from the Ohio Power Siting Board. If approved, turbine parts would be delivered to the Port of Cleveland for partial assembly before construction on Lake Erie. Friedman is a member of the Leedco board.

Davis said the Port Authority believes the Icebreaker Wind cargo could be the first of many wind turbine deliveries as the Midwest adopts wind power.

The first vessel to arrive at the Port of Cleveland after the St. Lawrence Seaway opens, which has been announced for March 26, is expected to be a freighter from the Polish Polska Zegluga Morska, known as Polsteam. The arrival time is not yet posted, but it takes a freighter 62 hours to reach the Port of Cleveland after it enters the St. Lawrence Seaway.


SOURCE: Crain’s Cleveland Business