Port of Thunder Bay
Once the largest grain port in the world, the Port of Thunder Bay has a long, storied history and is the western-most entry point for Canadian exports in the St. Lawrence Seaway system. It’s also one of the largest ports from a physical geographic stance, measuring about 35km in length. The Port of Thunder Bay is the largest inland waterway in the world with the Thunder Bay Port Authority allocated under the supervision of Canada’s Federal Minister of Transport, Marc Garneau.
To this day, the Port of Thunder Bay has the largest grain storage capacity in North America with a massive shipping capacity that has handled just less than 9 million tonnes per year over the past five years and is Canada’s second-largest grain port behind only Vancouver. The Port has an economic impact of about $300 million per year for Thunder Bay.
Some 900 people are employed by the Port of Thunder Bay throughout a number of facilities with each of the Port’s eight elevators employing about 60 people. There is also Keefer Terminal, which individually has the most employees at about 150. The three prime objectives of the Port are: to diversify and increase marine cargo; invest in strategic infrastructure; and promote partnerships and engagement.
The Canadian Business Journal recently spoke with Port of Thunder Bay CEO Tim Heney about the Port’s activities and its importance to the City’s economy and throughout the national shipping network.
“It’s a large natural harbour with very little dredging required. It’s the largest export port on the Seaway meaning that most of the cargo exiting the Welland Canal originates in Thunder Bay,” he begins.”
Heney has served as the Port’s CEO since 2004 and while he has noticed certain products do change over the years, the main cargo product is now – and always has been – grain. Shipments had been declining until a remarkable turnaround in 2012 after the change to the Canadian Wheat Board, after which shipments soared by about 25%.
“That was a welcome boost to the Port. For the past 15 years we’ve had an initiative to try and bring inbound general and project cargo back to the Port. That has been interesting and has good critical mass with such things as steel, pipe, machinery and wind turbines destined for western Canada,” says Heney.
Success at the Port of Thunder Bay is largely predicated on strategic partnerships and promotion in what has become a very competitive global marketplace. Transporting cargo to Thunder Bay involves dealing with fierce competition from other supply chains. Located in the centre of Canada some 3,700km from the Atlantic Ocean, Thunder Bay is the furthest inland port in the country. It is Heney’s job to convince shippers that going through the Seaway and Thunder Bay is the most competitive route. In order to do that the executive team at Thunder Bay work closely with inland transportation such as the railroads and truckers because only a very small percentage of the cargo has Thunder Bay as its target destination. The final stops are most often Alberta, Saskatchewan or Manitoba. The Port also has the luxury of having both national railways at its disposal for transportation by train.
“The challenge is reaching down the supply chain and making sure we have a competitive package when you roll the entire thing together,” notes Heney.
An integral part of the Port of Thunder Bay’s strategy is expanding upon the successful project cargo corridor, facilitating the movement of dimensional cargo to and from Western Canada and international markets. The Port coordinates the activities of stevedores, trucking companies, equipment operators, railways and fabricators to ensure that project cargo is handled with the highest-degree of efficiently. As with any place of business, workers safety is always front of mind. The Port of Thunder Bay has implemented a plethora of enhanced safety programs, which has no doubt factored in its excellent track record with respect to accident-free days.
Noticeable augmentations in land transportation in the region have also added to the overall efficiency of the supply chain system. One substantial advancement Heney points to is the Highway 11/17 Hawk Lake Re-alignment and Underpass Replacement near Kenora where the railway now goes over the roadway. The new highway and bridge structure allows for the travel of oversized truckloads of bulk cargo on this portion of the Trans-Canada Highway, where previously there was a height restriction of less than 5 metres.
The highway itself has numerous two-lane sections, especially between Thunder Bay and Kenora, which is the only real limitation, albeit a minor one at that as there are an adequate number of passing lanes along the way.
“At one time wind turbines turned to rail but they are back mostly on trucks again. It’s amazing the size of the pieces they are able to move along a two-lane highway. It’s been a trend in recent years to have bigger modules sent to the final destinations, which means less assembly on location,” says Heney.
In July, 2018, Heney announced that funding from the federal government would cover half of the $15 million multi-stage Keefer Terminal project that has been ongoing for the last 12 years. An additional $1 million was derived from the Northern Ontario Heritage Fund Corporation and the remainder is the responsibility of the Thunder Bay Port Authority. The completed upgrade will result in the addition of new tracks and laydown areas for cargo staging and the construction of a 4,645 square-metre heated multi-purpose warehouse facility.
“Keefer Terminal here at the Port was built when the Seaway was constructed back in 1959 and it was basically built for packaged freights. At that time the Trans-Canada Highway wasn’t completed over the Northshore of Lake Superior so a lot of materials came up to Thunder Bay by ship including groceries, automobiles and just about everything else. A lot of it was then transferred to boxcars heading west. That all ended in the early 1980s and so the terminal that had been built for that purpose has been reconfigured to handle more and more larger pieces that don’t go in the buildings, they go outside, such as steel and wind turbines,” explains Heney.
Enhancements have been ongoing at the terminal, including the development of those all-important additional laydown areas for outside cargo. It is the final phase of moving one of the buildings off the dock and building a new structure further away and opening up the dock face for greater volumes of cargo.
“We’re also building an improved railyard with eight more loading spots and that will further enhance our abilities in moving the cargo to the west,” adds Heney.
Forestry and mining
Most forest products from the Thunder Bay region are destined for the U.S. and the vast majority of that cargo is delivered either by rail or truck. It’s been a success for the mills in that they are close to the wood source and in turn close to the markets such as Minneapolis, Chicago and Detroit. There has been lumber shipped by barge across the lakes but even that hasn’t happened in some time.
“It’s not far enough to justify ships although we have occasionally done some export cargo to Europe on pulp but it generally is not the main market for the mills in the Thunder Bay region,” remarks Heney.
“We brought in mining equipment for the regional gold mines such as the big shovels and other large components made in Europe,” continues Heney.
In addition to grain, potash and coal are also represents large cargo shipments.
“Coal from here is the metallurgical coal, used in steelmaking and that comes from the Rocky Mountains. We’re the only load-point for potash on the Great Lakes and it is exported to Europe and by lakers to U.S. destinations,” explains Heney.
A large facility called Thunder Bay Terminals has two loop tracks where cars are continuously loaded in motion to ships. It has a capacity of about 11 million tons per year providing huge potential for the Port and the Seaway at that location.
Looking to the future
The Port of Thunder Bay ended its last shipping season on January 13 and typically reopens again around March 25 – depending on the weather and the amount of ice cover on Lake Superior.
During the two months of winter when the ships are not entering or exiting the Port, ship repairs continue and the terminal is operational year-round and so there is a lot of warehousing projects to complete. There are manufacturing facilities in the terminal and there is also cargo to be loaded from last season on to rail cars, so in reality it’s a very short shutdown season.
“We do marketing work and hold a few events out west as well as attend a few trade shows to get more business lined up for the following year,” explains Heney. “Right now we’re preparing for the building project. We have that preloaded for the foundations so once spring sets in we’ll start working in earnest on that.”
As one would surmise based on the geographic layout of the St. Lawrence Seaway, Europe is the number one destination of ships leaving the Port of Thunder Bay. North Africa, the Middle East and Latin America are also in the mix, as are ships from virtually all over the world. Heney hopes to see more diversified trade options with European and Asian partners, especially in light of the trade tensions that have existed in recent years with the United States, which has been and continues to be, Canada’s largest trading partner. Newer technologies are making it much more inviting for a larger number of shipping companies to consider the St. Lawrence Seaway.
“A lot of money has been spent on the system redoing all the locks; hands-free mooring will be available as of this year on all the locks including the American ones. It’s a suction-cup type system that grabs onto ships and holds them in place while they go up and down in the lock. What that means is you don’t have to have your ship fitted to get into the system. In order to do that you had to have cables instead of ropes. It’s about a $200,000 fitting to get through the Seaway. Not all ships wanted to make that kind of expenditure. This new system will open the market to a lot more ships without the need for the Seaway fittings as in the past,” notes Heney.
Other ports would certainly be envious of the huge capacity at the Port of Thunder Bay. Since the major decision on the Canadian Wheat Board in 2012 there have been record harvests out west and they are projected to continue. Grain production in the west is growing between 2% to 3% each year, which is a significant amount. The largest consumption of grain moving forward is projected to be the Middle East and North Africa, which are both markets served by the Seaway.
“We’ve continued to see increased tonnage over time,” concludes Heney. “The project cargo and the general cargo also have a lot of potential. There is supply chain competition but it’s becoming evident that our route has got some definite advantages.”