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MICHU-SG-82-501

GRAIN TRANSPORTATION ON THEGREAT LAKES-ST. LAWRENCE SEAWAY

MICHIGAN STATE UNIVERSITY

COOPERATIVEEXTENSIONSERVICE

Michigan State University Cooperative Extension ServiceMichigan Sea Grant Program • University of Michigan andMichigan State University cooperating

Michigan State University Extension Bulletin E-1432Cooperative Extension Service Michigan State University

MICHU-SG-82-501

GRAIN TRANSPORTATION ON THE

GREAT LAKES-ST. LAWRENCE SEAWAY

Prepared by

Dr. Stanley R. Thompson, Associate Professorand

Ms. Rebecca L. Johnson, Graduate Assistant

Department of Agricultural EconomicsMichigan State University

December 1982

The following individuals are acknowledged for their contribution to this report: Alpha H.Ames, Jr., Acting Great Lakes Region Director, Maritime Administration, U.S. Depart-ment of Transportation, Cleveland, Ohio; Albert G. Baliert, Director of Research, GreatLakes Commission, Ann Arbor, Michigan; John O'Doherty, Supervisor, Marine Transporta-tion Planning, Michigan Department of Transportation, Lansing, Michigan; and George J.Ryan, President-elect, Lake Carriers Association, Cleveland, Ohio.

Michigan Sea Grant is a cooperative effort directed jointly by the University of Michiganand Michigan State University. This project has been funded by NOAA Grant NA-80AA-D-00072 and the State of Michigan.

Cover photo of the London Viscount at Mid-States Terminals, Inc., Toledo, Ohio, courtesyof Dr. Albert G. Baliert, Great Lakes Commission.

GRAIN TRANSPORTATION ON THE GREAT LAKES-ST. LAWRENCE SEAWAY

TABLE OF CONTENTS

Page

I . INTRODUCTION 1

I I . GRAIN FLOWS, PORT OF ORIGIN AND COUNTRY OF DESTINATION . . . 7

I I I . GRAIN EXPORT PROJECTIONS TO 1990 26

IV. PORT CAPACITIES 33

V. SHIPPING RATES 38

VI. OTHER FACTORS AFFECTING THE RELATIVE COMPETITIVENESS

AMONG GRAIN SHIPPING PORTS 51

VI I . SUMMARY . 63

BIBLIOGRAPHY 67

APPENDIX A 70

APPENDIX B . . 77

GRAIN TRANSPORTATION ONTHE GREAT LAKES-

ST. LAWRENCE SEAWAY

I. Introduction

The U.S. agricultural sector contributessignificantly to both the national and worldeconomies. Despite the fact that total agri-cultural exports represent only about 20 per-cent of total U.S. exports, they offset a sub-stantial portion of the nonagricultural tradedeficit (Table 1). For the first time in thelast five years, 1981 net agricultural exportsoffset more than 50 percent of the nonagri-cultural trade balance.

Grains and oilseed exports account forsome two-thirds of the total value of agricul-tural exports. For the U.S. agricultural sec-tor, grain exports continue to provide anincreasingly important market for farm prod-ucts. In 1950, the output of one in tenharvested acres was exported. In recentyears, however, one of every three harvestedacres has been consumed abroad (Table 2) andby 1990, nearly 50 percent of total U.S. grainproduction can be expected to be exported.

The unprecedented volumes of grainmoving into export markets have createdconsiderable concern about the ability of theinland transportation system to meet futureexport demands. In 1979, the total of allgrains handled at U.S. ports was 4.56 billionbushels while in 1980 a record 4.94 billionbushels was reached (Table 3). Exports ofwheat, corn, and soybeans in 1981 are placedat 4.84 billion bushels and by 1985 over 5.0billion bushels will be destined for exportmarkets. By 1990, total grain exportsfrom U.S. ports are expected to exceed 6.8billion bushels. Since the demand for graintransportation services is clearly derivedfrom the final demand for U.S. grains andoilseeds, substantial investments in the graintransportation and handling system will berequired in the 1980s.

A recent analysis of the adequacy of thetransportation and port system indicates thatthe total U.S. grain export capacity in 1980

would be 7.1 billion bushels per year. Overthe next decade, projected grain export vol-umes will approach current estimated capa-city. Although the inland transport systemhas been able to handle historical demand, itcould well be a constraining factor in effec-tively satisfying projected grain export by1990.

The waterway and port facilities are notthe only constraints that may inhibit theorderly flow of grain to export markets; thegrain must first get to the export terminals.The nation's truck, rail, and barge system hasplayed a dominant role in the movement ofgrain to port facilities—especially from pro-duction areas that do not have direct accessto the waterways.

Increasing reliance upon rail use in theshipment of grain to export markets hasoccurred largely because of economies ofunit train shipments. While periodic railequipment shortages still occur, historicallythe rail system has adequately moved thenation's grain to export facilities. However,continued abandonment of rail lines couldleave many grain shippers without rail ser-vice. While truck shipment generally in-volves higher transport costs to the exportshipper than either rail or water, servicequality is often superior. Although the cur-rent grain handling capacity of the nation'struck fleet is not known, truck capacity hasnot been a constraining factor in the move-ment of grain to export markets. Continueddisinvestment in the rural road bridge systemcould severely hamper the movement of grainto export markets. Barge transportation hasbeen increasingly used to move the Midwest'sgrain to the export ports in the Gulf. As withunit trains, economies have been realized inbarge shipping, and the highly competitivebarge industry ensures that those economiesare passed on to the shipper.

The demand for commercial transporta-tion services is derived from the final

Gaibler, Floyd D., "The Transportation Sys-tem's Capacity to Meet Grain Export De-mand, 1979/80 Outlook," Working Paper,USDA-NED-ESCS, Washington, D.C., Octo-ber 1979. (Capacity estimate for 1980 wasobtained from personal correspondence.)

TABLE 1

Agricultural and NonagriculturalTrade Balance Market Year Basis

(October/September)

1975 1976 1977 1978 1979 1980 1981

Agricultural Exports

Nonagricultural Exports

Total Exports

Agricultural Imports

Nonagricultural Imports

Total Imports

Agricultural Trade Balance

Nonagricultural Trade Balance

Total Trade Balance

21,57881,280

102,858

9,579

91,482

101,000

11,999

-10,202

1,777

22,14787,242

109,389

10,109

95,774

105,881

12,038

-8,532

3,506

23,97394,311

118,285

13,357

129,291

142,648

10,616

-34,980

-24,364

27,291103,905

131,196

13,886

150,905

164,792

13,405

-47,000

-33,595

31,975135,501

167,476

16,187

178,464

194,651

15,788

-42,963

-27,175

40,481169,563

210,044

17,300

200,857

238,157

23,181

-51,294

-28,113

44,139184,320

228,459

17,195

234,700

251,895

26,944

-50,380

-23,436

Source: USDA, ERS, Agricultural Outlook(various issues).

TABLE 2

U.S. Grain Production,Consumption, and Exports

Selected Commodities and Years

Corn

Production

Domestic Use

Exports

Wheat

Production

Domestic Use

Exports

Soybeans

Production

Domestic Use

Exports

Source: USDASupply and

1950

2,764

2,753

117

1,019

689

345

299

271

28

, ERS/FASDemand

1955

2,873

2,624

120

937

604

322

373

307

68

I960 1965

- Millions

3,907

3,387

292

1,355

591

654

555

445

135

4,084

3,705

687

1,316

731

867

846

589

251

, World AgriculturalEstimates (various

1970

of Bushels

4,152

3,978

517

1,352

772

741

1,127

824

434

1975

-

5,829

4,082

1,711

2,123

772

1,173

1,547

935

555

1980

6,648

4,900

2,350

2,370

773

1,510

1,817

1,111

720

1981

8,021

5,085

2,000

2,793

853

1,773

2,030

1,148

930

issues).

TABLE 3

Total Monthly and Annual GrainInspection for Export, 1973-1980a

Year Jan . Feb. Mar. Apr. May Jun. J u l . Aug. Sept . Oct. Nov. Dec. Tota l

- Million Bushels -

1973 239.9 260.8 312.1 251.4 264.7 350.4 263.7 354.1 275.9 267.7 378.9 271.1 3,495.8

1974 242.7 255.0 303.0 235.9 289.4 222.8 211.2 223.3 167.6 177.8 297.3 256.6 2,882.3

1975 321.9 248.1 226.4 212.3 197.0 161.2 213.1 285.2 222.3 402.6 343.3 279.6 3,113.0

1976 298.7 282.3 292.7 296.9 273.6 294.8 280.6 282.9 270.5 363.6 353.3 273.6 3,560.5

1977 257.9 260.4 299.5 300.8 278.3 245.7 257.0 267.6 298.7 264.2 320.2 313.2 3,367.4

1978 267.6 301.5 333.7 363.6 415.1 400.1 337.9 379.0 330.7 354.5 342.0 339.5 4,165.2

1979 292.2 270.0 335.5 339.2 351.2 378.4 424.3 411.4 356.3 466.5 490.6 445.8 4,561.4

1980 405.1 379.0 490.0 427.0 372.5 360.5 408.9 411.2 404.3 449.0 461.1 452.7 4,940.3

1981 465.2 393.9 429.2 400.0 342.3 328.6 340.0 363.2 437.4 475.6 455.3 407.3 4,838.0

The data do not include sunflower seed ship-ments, nor export of grain from inland ports.

Source: Grain Market News, USDA.

demand for grain at various market locations.Perhaps the greatest force influencing thedemand for grain transportation services isthe quantities sold in export markets. There-fore, the ability of the U.S. transportationsystem to cope with future demands will belargely dependent upon future grain exports.

The future role that the Great Lakes-St. Lawrence Seaway will play in meetingprojected export grain demands will dependupon many factors. The grain shipment de-mands placed upon the Great Lakes-St. Law-rence Seaway system will stem from varia-tions in export sales as well as the competi-tive nature of trucks, railroads, and theMississippi River. In addition, other factorsthat will influence the future role of theGreat Lakes-St. Lawrence Seaway in thetransport of grain include: the level and spa-tial shifts in grain production, the effects ofchanging real energy prices, the specific des-tination of grain exports, and the physicalcondition of the transportation system, in-cluding potential Great Lakes-St. LawrenceSeaway constraints.

The purpose of this report is to provideinformation on the current and future role ofthe Great Lakes-St. Lawrence Seaway in thetransportation of grain. In this quest, thefollowing objectives are established:

(1) Describe the nature of grain flows onthe Great Lakes-St. Lawrence Sea-way, including port of origin andcountry of destination;

(2) Project grain export levels to 1990 bymajor U.S. port area;

(3) Evaluate future grain exports rela-tive to port capacities;

(^) Compare the relative competitive-ness of Great Lakes ports in the ship-ment of grain through an examinationof shipping rates;

(5) Comment on the effect of other se-lected factors on the competitivenessof the Great Lakes in the shipment ofgrain relative to other port areas.

The plan of development of this reportwill follow the same order as the aboveobjectives.

H. GRAIN FLOWS, PORT OFORIGIN AND COUNTRY

OF DESTINATION

Grain traffic represents the single mostimportant (in terms of volume) commoditygroup transported on the Great Lakes-St.Lawrence Seaway. An understanding of thecurrent and potential importance of grainflows on the Seaway is necessary in order tobetter place in perspective the role of graintransportation in economic development.

This section will present some descriptiveinformation on grain flows over the GreatLakes-St. Lawrence Seaway with a focus onthe origin and destination of grain shipments.First, a brief overview of total commoditytraffic on the Seaway will be presented.Next, a temporal view of Seaway grain ship-ments is provided. And finally, an examina-tion is made of both U.S. and Canadian grainshipments by port and destination as well asthe volume and destination of U.S. grainshipped from Canadian ports.

Specific information on grain flows bymajor port for the U.S. and Canada is con-tained in Appendix A and B, respectively.

Commodity Traffic on the Seaway

A view of the Great Lakes-St. LawrenceWaterway and the location of the major portsis depicted in Figure 1. After the Seawayopened in 1959, substantial increases in traf-fic followed. The increase in traffic islargely attributed to the use of larger Lakervessels. The expanded lock sizes enabled theuse of these larger Lakers which carry con-siderably more volume than the ocean-goingsal ties.

During the first year the Seaway was inoperation, the traffic volume of all commodi-ties moving through the Montreal-LakeOntario section of the Seaway more thandoubled over that of the previous year (seeTable 4). Increases were particularly high foriron-ore and agricultural products. Since1959, the most rapid traffic growth tookplace during the period 1960-65. After 1965,a gradual increase in all commodity move-ments occurred reaching an apparent plateauduring the 1977-79 period.

Figure 1

Great Lakes-St. LawrenceWaterway and Ports

Sept-Iles

Montreal-Lake Ontario Section7 locks"St. Marys River

Sault Locks

200 Miles

St. Clair River, Lake St. Clair and theDetroit River.

TABLE <f

Traffic on the Seaway,by Major Commodity Group, 1958-80

(Thousand Short Tons)

Commodity

AgriculturalProducts

Iron Ore

Coal and Coke

Petroleum andPetroleumProducts'3

ManufacturedIron andSteel

Other

All Com-modities

SeawaySection8

W.C.M-LO

W.C.M-LO

W.C.M-LO

W.C.M-LO

W.C.M-LO

W.C.M-LO

W.C.M-LO

1958

6,6534,868

4,2911,526

4,4601,071

1,9211,009

301196

3,6483,092

21,27411,762

1959

8,6377,375

6,9156,187

4,8961,183

1,4441,692

734629

4,9113,527

27,53720,593

1960

9,7118,220

7,8564,315

4,5001,111

1,4311,880

1,2321,448

4,5203,336

29,25020,310

.1965

18,47717,634

16,13412,11h

7,3891,227

1,6322,565

3,2193,721

6,5695,462

53,42043,383

1970

21,15219,799

16,09115,119

11,174824

1,8713,985

5,3315,725

7,3445,719

62,96351,171

1971

23,80522,589

13,56713,427

9,743852

1,5843,041

6,3516,602

7,8596,437

62,90952,948

1972

24,43123,517

13,73212,533

10,511864

1,7953,935

5,8516,343

7,8746,465

64,19453,657

1973

25,52324,331

17,18315,692

8,7911,093

2,6315,061

5,0595,450

8,0086,007

67,19557,634

1974

17,51816,173

14,91414,291

6,9751,505

1,8183,704

3,4163,741

7,6594,732

52,36044,146

1975

22,90921,430

16,46914,506

9,3741,357

1,5352,651

2,3422,601

7,2205,465

59,84948,010

1976

21,67120.674

21,55020,535

9,3592,167

1,2822,148

3,5313,809

6,9475,064

64,34054,397

1977

25,31424,049

21,96722,274

9,7402,472

1,4752,615

5,5895,866

7,6566,064

71,74163,340

1978

31,98430,741

17,28614,929

8,7463,778

1,4312,612

4,3984,662

8,5516,052

72,39662,774

1979

28,97227,471

16,66616,334

11,3743,109

2,2953,024

3,7864,063

9,8476,986

72,94060,987

1980

31,15029,677

12,58712,132

9,6221,794

2,2292,240

1,4542,324

8,6686,351

65,71054,518

W.C. is the Welland Canal and M-LO is the Montreal-Lake Ontario section.

Including fuel oil.

Source: The St. Lawrence Seaway Authority, Economics and Planning Branch, Economics Section.

Since 1959, the traffic for all the com-modity groups increased; however, somegroups increased substantially more thanothers. In comparing volumes for the period1960-61 to that in 1979-80, the increase involume for all commodities was more than150 percent. While during this 20-yearperiod, volume increases in both iron-ore andagricultural products exceeded 200 percent,the following four major commodity groupsexperienced increases of less than 10 per-cent: coal and coke, petroleum and petrole-um products, manufactured iron and steel,and the "other" category. While shipments ofboth iron-ore and agricultural commoditiesexperienced rapid growth during the last fiveyears (1976-80), the traffic volume for agri-cultural products has been particularly dra-matic. In 1980, the only major commoditygroup that increased over the previous yearwas agricultural products.

to 52.9 percent in 1980, while the U.S. shareincreased from an estimated 29 percent in1976 to 43.2 percent in 1980. The percentageof cargo directly destined to foreign marketshas remained relatively constant during thisfive-year period, while the relative share ofshipments originating in foreign markets forshipments to the U.S. and Canada has de-clined.

In summary, some 53 percent of the cargotons moving over the Seaway originate inCanada, while 43 and 4 percent originate inthe U.S. and foreign markets, respectively.Of the total tonnage originating in the U.S.,over two-thirds is destined for Canadianports. However, much of this tonnage isultimately transshipped to foreign markets.A discussion of the volume and destination ofU.S. grain shipped from Canadian ports ispresented later in this section.

Origin and Destination ofTotal Commodity Traffic

The relative use of the Seaway by Canadaand the United States for 1980 is given inTable 5. Although the relative usage changeseach year, the data for 1980 provide a pic-ture of current traffic activity. In recentyears, however, there has been an apparentshift in products destined for Canada. Duringthe five-year period of 1976-80, the percentof total traffic unloaded in Canada increasedfrom an estimated 45 to 63.1 percent, whilethe total cargo destined for U.S. ports de-creased from an estimated 41 to 20.4 per-cent. One reason for the increase in ship-ments to Canada during this time is theincreased use of Canadian lakers operating onfeederships between upper Great Lakes portsand transshipment ports along the St. Law-rence River. The design of the lakers allowsthem to carry out more cargo than an ocean-going vessel and therefore to get a greaterreturn to fixed costs. At the same time, thedeeper ports at the transshipment pointsallow large ocean vessels to load there andshippers can gain even further on the chargeper ton.

During this same 1976-1980 period, prod-ucts originating from Canadian ports de-creased from an estimated 62 percent in 1976

Grain Shipments, Welland Canal

Grain shipments through the WellandCanal section of the St. Lawrence Seawayare shown in Table 6. Despite fluctuations inthe total volume of grain shipped from yearto year, the percent of total traffic com-posed of grain has remained relatively stable.Since the opening of the Seaway in 1959,grain shipments have accounted for about 33percent of the total Seaway shipments. Dur-ing the three-year period 1978-80, however,this percentage increased to an average of 43percent. In 1980, grain shipments were 43.7percent of total Seaway shipments—thegreatest percentage in the history of theSeaway.

During the three-year period 1978-80, thecombined grain shipments of the U.S. andCanada averaged 28,237,000 short tons. Atthis same time, the allocation of total grainshipments averaged 52 percent for the U.S.and 48 percent for Canada. Prior to the1978-80 period, the U.S. and Canadian sharestended to be 45 and 55 percent, respectively.

Grain Shipments, Variety and Port

U.S. grain shipments by major port areafrom 1972 to 1981 are shown in Figure 2.The dominant role of the Gulf ports in the

TABLE 5

Combined Domestic and Foreign Trafficon the Montreal-Lake Ontario

and Welland Canal Sections, 1980

(000 Cargo Tons)

Destination

Canada

United States

Foreign

Canada

3,681 upa

17,133 downa

10,734 up363 down

3,527 down

35,438

52.9%

Origin

UnitedStates

87 up20,826 down

77 up397 down

7,534 down

38,903

43.2%

Foreign

492 up

2,128 up

—

2,620

3.9%

Total

42,219

13,681

11,061

66,961

Percent

63.1

20.4

16.5

100.0

Downbound traffic moves toward the sea;upbound moves inland.

TABLE 6

Grain8- Shipments Through theWelland Canal Section of the

St. Lawrence Seaway, 1958-80

(Thousand Short Tons)

Origin & Destination 1958 1959 1960 1965 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

U.S. Grain:U.S.-U.S.U.S.-Canadab

U.S.-Overseas

Totalc

% of Total GrainTraffic

Canadian Grain:Canada-Canada'*Canada-Overseas

Totalc

% of Total GrainTraffic

Total Combined

% of All CommodityTrafficd

396 131 151 25 40 39 34 22 14 24 24 25 77 31 31636 1,408 1,570 3,874 5,946 3,031 2,639 5,850 4,354 4,457 3,891 4,030 6..331 7,408 8,80719 1,860 2,355 4,068 2,992 5,783 6,778 6,725 2,837 4.609 4,621 6,282 9,552 7.341 4,452

1,051 3,398 4,076 7,967 8,978 8,853 9,451 12,597 7,205 9,090 8,536 10,337 15,960 14,780 13,290

16.0 42.2 44.2 46.0 46.0 40.4 42.0 53.2 43.4 41.8 41.9 43.5 53.6 56.3 46.3

N/A 4,236 4,552 8,637 10,479 12,265 12,227 10,633 8,488 12,110 11,116 12,440 12,889 10,849 13,699N/A 398 5_7_ 708 493 817 819 453 899 539 734 966 921 606 1,716

N/A 4,634 5,131 9,348 10,972 13,082 13,046 11,086 9,396 12,649 11,850 13,406 13,810 11,455 15,415

84.0 57.4 55.7 53.9 55.0 59.6 58.0 46.8 56.6 58.2 58.1 56.5 46.4 43.7 53.7

N/A 8,032 9,207 17,315 19,950 21,935 22,497 23,683 16,601 21,739 20,386 23,743 29,770 26,235 28,705

N/A 29.2 31.5 32.4 31.7 34.9 35.0 35.2 31.7 36.3 31.7 33.1 41.1 36.0 43.7

Includes whaat, oats, barley, rye, flaxseed, corn and soybeans.

Mainly shipments to St. Lawrence elevators for export; sotr.e for domestic consumption.cCanada-U.S. shipments are intermittent and of minimal size. They are included in totals where relevant.

All commodity traffic is from Table 4.

Source: The St. Lawrence Seaway Authority, Economics and Planning Branch, Economics Section.

Figure 2

Bil. bu.

3.5

3.0

2.5

2.0

1.5

1.0

U.S. Grain Exports by MajorPort Area, 1972-81

Gulf

Great Lakes

1972 1973

Calendar year

1974 1975 1976 1977 1978 1979 1980 1981

10

export of U.S. grain is conspicuous. The datapresented in this figure are for the U.S. anddo not include Canadian shipments. Hence,total grain moving over the Great Lakes isconsiderably larger than that depicted inFigure 2. Canadian shipments are shown inTable 6.

In Table 7, grain exports are disaggregat-ed by variety of grain for each port andexpressed in percentage terms. Again, thedominant role of the Gulf ports in total grainexports is evident.

In Figure 3, total U.S. grain exports ofcorn, soybeans, and wheat are given for allGreat Lake ports. This information is disag-gregated by individual Great Lake ports inTable 8. In recent years, the bulk of the cornexport originates at Toledo and Chicago/Mil-waukee ports. A majority of the U.S. GreatLake soybean exports originate at Toledo,and the Duluth/Superior ports dominate inthe export of wheat.

U.S. Great Lakes 2Grain Shipments, 1980

In 1980, a total of 936 cargoes represent-ing 634.0 million bushels of grain were ship-ped from U.S. Great Lakes ports (seeTable 9). The largest volume commodityshipped on the Lakes in 1980 was corn-representing 38 percent of total grain vol-ume. Wheat shipments rank second in vol-ume. Corn and wheat shipments combinedrepresent two-thirds of the total volume.

Duluth-Superior is the largest volume U.S.grain port on the Great Lakes. Over 360million bushels of grain were shipped fromDuluth-Superior in 1980. At Duluth-Superior,wheat shipments represented the greatestvolume commodity followed by corn and sun-flower seeds.

The information presented in this subsectionis for 1980 only and was obtained from grainexchanges and elevators by the Great LakesCommission. Since the source of these dataare not from the same secondary sourcescited elsewhere in this study, some differ-ences can be expected to exist.

The second most active U.S. lake port isToledo, Ohio. Over 160 million bushels ofgrain were shipped from Toledo area eleva-tors in 1980. Corn shipments accounted fornearly two-thirds of the volume of grainshipped from Toledo. The third most activeport in 1980 was Milwaukee, Wisconsin fol-lowed by Chicago, Illinois; Huron, Ohio; andSaginaw, Michigan.

Information on the specific country ofdestination for each port by type of grain isreported in Appendix Tables A.I to A.6.

US. Grain Shipped -From Eastern Canada, 1980

Approximately 50 percent of all grainshipped from U.S. Lake ports is destined forEastern Canadian ports. The final destina-tion of most of this grain, however, is notCanada, but rather it is transshipped at East-ern Canadian ports before it moves to itsultimate foreign destination.

The quantities of U.S. grain that are ship-ped from Eastern Canadian elevators areshown in Table 10. The volume shipped bytype of grain is provided for 1980. There aresome reasons why the volume of U.S. grainshipped to Eastern Canada is not exactlyequal to the quantity of U.S. grain shippedfrom Canada. For example, in 1980, U.S.grain shipments to the St. Lawrence (EasternCanada) ports totaled 287.5 million bushels(see Table 9), while U.S. grain shipmentsfrom Canada totaled 261.1 million bushels.This differential can be attributed to a varie-ty of factors such as: (1) some U.S. graindestined for Eastern Canada may have beenloaded in one year, but not reach its Canadi-an destination until the next year; (2) somegrain may have been received at Canadianelevators, but was not shipped the same yearand was in storage at the end of the season;or (3) a small amount of U.S. grain is useddomestically in Canada.

The specific country of destination forU.S. grain from Eastern Canadian ports isalso shown in Table 10. Although the

Ibid.

11

TABLE 7

Grain Inspections for Exportby Port, 1976-1981

Year/Commodity Lakes Atlantic Gulf Pacific Total

- Percent -

1976WheatCornSoybeansTotala






5 .98 .9

10.78.7

12.29 .0

10.610.9

16.412.012.113.2

12.511.9

8 . 111.1

10.49 .77 .79 .9

8 .07 .38 .68 . 1

6 .723.211.515.0

4 . 222.711.013.7

3 .719.211.212.1

2 . 119.413.712.9

5 .015.311.611.0

6 . 315.510.510.6

50.767.577.865.4

53.067.378.266.0

50.262.876.762.4

52.858.178.260.9

49.159.880.760.1

54.264.479.562.7

36.70 . 40 . 0

10.9

30.61.00 . 29 .4

29.76 .00 .0

12.3

32.610.6

0 . 015.1

35.515.2

0 . 019.0

31.512.8

1.418.6

100.0100.0100.0100.0

100.0100.0100.0100.0

100.0100.0100.0100.0

100.0100.0100.0100.0

100.0100.0100.0100.0

100.0100.0100.0100.0

Includes: wheat, rye, corn, oats, barley,sorghum, and soybeans.

Source: Grain Market News, USD A.

12

150 -

100

Figure 3

U.S. Grain Exports: Corn,Wheat, and Soybeans, 1972-81

50

1972 1973

Calendar year

1974 1975 1976 1977 1978 1979 1980 1981

13

TABLE 8

Corn, Soybean, and Wheat Inspectionsfor Export By Great Lake

Ports, 1975-1981

Item 1975 1976 1977 1978 1979 1980 1981

- Million Bushels -

CornChicago AreaDuluth/SuperiorToledo AreaSaginaw AreaTotal

SoybeansChicago AreaDuluth/SuperiorToledo AreaSaginaw AreaTotal

WheatChicago AreaDuluth/SuperiorToledo AreaSaginaw AreaTotal

All GrainsChicago AreaDuluth/SuperiorToledo AreaSaginaw AreaTotal

4911494

113

13044158

1115133

132

31431059

320

6113783

155

15044160

3485157

9961296

310

48a

5854

142

14047162

289162

109

641471487

366

75a

56984

235

20065393

14169183

204

11025218212556

119511026

278

19538262

b134142

150

13820615311508

72421165

235

5152260

—121122

135

772101809

476

608861

155

14149266

3104174

129

771531528

390

Chicago area includes Milwaukee. Milwaukeeexported 17.9 million bushels in 1977 and 37.6million in 1978, 37 and 50 percent, respec-tively, of total for Chicago and Milwaukee.After 1978, separate information for Chicagoand Milwaukee is not reported.

Less than 1/2 million.

"All grain includes: wheat, rye, corn, oats,barley, flaxseed and soybeans.


TABLE 9

U.S. Great Lakes GrainShipments, 1980

(000 Bushels)

Ports & Destinations

U.S. Great Lakes - TotalDirect OverseasSt. Lawrence3

Great Lakes - CanadaU.S. Great Lakes

Duluth/Superior - TotalDirect OverseasSt. LawrenceGreat Lakes - CanadaU.S. Great Lakes

Toledo, Ohio - TotalDirect OverseasSt. LawrenceGreat Lakes - CanadaU.S. Great Lakes

Chicago, Illinois - TotalDirect OverseasSt. Lawrence

Milwaukee, Wisconsin - TotalDirect OverseasSt. LawrenceGreat Lakes - Canada

Huron, Ohio - TotalDirect OverseasSt. LawrenceGreat Lakes - CanadaU.S. Great Lakes

Saginaw R., Michigan - TotalSt. LawrenceGreat Lakes - Canada

No. ofCargoes

936357358107114

4982611233

ill

26362144552

411724

6612477

4453351

24177

Total

633,971256,042287,47635,64554,808

362,745200,947106,5041,95953,335

166,55535,154111,96718,503

931

30,8499,83321,016

49,0917,03638,7933,262

15,5683,0721,80210,152

542

9,1637,3941,769

Wheat

185,54863,15072,605

90748,836

169,87861,97360,492

47,413

12,5361,1779,521907931

—

—

1,150

608

542

1,9841,984

Corn

238,13951,070

167,27419,795

41,94317,53023,504

909

105,55818,00480,1777,377

26,3356,04620,339

49,0917,03638,7933,262

10,4952,4541,1946,847

4,6673,2671,400

Barley

41,93117,92518,621

5,385

41,93117,92518,621

5,385

—

—

—

~

~

—

—

Soybeans

60,40721,42525,08913,893

1,0471,047

48,46115,97322,26910,219

4,4643,787677

—

3,923618

3,305

2,5122,143369

Oats, Ryeb

& Flaxseed

9,9974,5233,8871,050537

9,9974,5233,8871,050

537

—

—

—

__

--

--

Sunflower0

Seed

97,94997,949

97,94997,949

—

—

—

—

~

~

—

Port Totals in Metric Tons

Cargoes Total Wheat Corn Barley SoybeansOats, Rye& Flaxseed

SunflowerSeed

U.S. Lake PortsDuluth/SuperiorToledoChicagoMilwaukeeHuronSaginaw River

93649826341664424

15,108,805 5,049,841 6,049,071 912,949 1,644,025 208,9818,083,144 4,623.369 1,065,412 912,9494,341,408791,708

1,246,982404,653240,910

341,178

31,29853,996

2,681,324670,217

1,246,982266,588118,548

28,4951,318,906121,491

106,76768,366

1,244,0181,244,018

St. Lawrence and Eastern Canada are used interchangeably.

Oats: Total - 4,137; Direct Overseas - 2,361; St. Lawrence - 549; Great Lakes - Canada - 1,050; U.S. Great Lakes -177.

Rye: Total - 5,773; Direct Overseas - 2,075; St. Lawrence - 3,338; U.S. Great Lakes - 360; Flaxseed - DirectOverseas - 8).

CSunflower Seed - Converted from metric tons (2,204.62 lbs.) to bushels at 28 lbs./bushel.

Source: Obtained from grain exchanges and elevators by Creat Lakes Commission.

TABLE 10

U.S. Grain Shipped FromEastern Canadian (St. Lawrence)

Elevators and Country ofDestination, 1980

(000 Metric Tons)

TotalMetric TonsBushels

DestinationAlgeriaBelgiumBrazilBulgariaChinaDenmarkEuropeFinlandFranceGhanaGreeceIraqIsraelItalyJapanW. GermanyE. GermanyLebanonMoroccoMalayaMaltaNorwayNetherlandsPortugalNigeriaRumaniaSpainTogoTunisiaUnited KingdomUSSRVenezuelaUnknown

Total

6,746.8261,083.2

83.9129.97.7

45.1310.97.127.449.493.742.95.911.1

182.0866.598.7

346.1342.625.664.421.111.834.1

371.429.127.5

124.32,048.5

11.164.5

362.8675.913.4

210.4

Wheat

1,944.571,444.5

83.980.47.7—

251.8—27.049.458.242.9—2.0

35.0167.6—50.2——64.4—11.826.7327.329.127.533.178.111.156.0294.412.313.4103.1

Corn

3,773.6148,559.1

- (000

—41.0—45.1————7.2——3.0—

579.213.6283.2294.6—————28.5——1.4

1,759.9—7.021.0

663.6—25.3

Oats Barley

8.0 319.2464.1 14,660.6

Metric Tons) -

—— —— ——— —— —— —— —— —— —— —

6.1— —

119.78.0

12.548.025.6

— —— —— —— —— —— —— —

38.5— —— —

1.5— —— —— —

67.3

Rye

66.92,633.7

——————————————————————15.6——51.3———————

Soybeans

634.723,321.2

—8.5——59.17.1.4

—28.3—5.9—

147.0—77.10.2———21.1—7.4————

210.5——47.4——14.7

16

composition of the countries receiving U.S.grain shipped from Canadian ports can varyconsiderably from year to year, in 1980 thefollowing countries received the greatest vol-ume in thousand metric tons: Spain (2,048.5);Italy (866.5); USSR (675.9); Netherlands(371.4); United Kingdom (362.8); West Ger-many (346.1); and East Germany (342.6).These seven countries received approximate-ly three-quarters of the total U.S. grainshipped from Eastern Canadian ports.

Canadian Great Lakes.Grain Shipments, 1980

In 1980, a total of 14.8 million metrictons of grain was shipped from CanadianGreat Lake ports (see Table 11). This com-pares to a U.S. Great Lake total of 15.1million metric tons (see bottom of Table 9).

Nearly 95 percent of the grain shippedfrom all Canadian Great Lake ports origi-nates at Thunder Bay. In 1980, 13.9 millionmetric tons of grain was shipped from Thun-der Bay which makes it the largest volumeGreat Lake port. By comparison, the largestvolume U.S. grain port, Duluth-Superior,shipped 8.1 million metric tons, or only about60 percent of the volume handled at ThunderBay.

By volume, wheat is the most importantCanadian grain shipped. In 1980, wheat ship-ments accounted for roughly 78 percent ofthe total Canadian grain volume. Barleyshipments ranked second in volume and rep-resented some 10 percent of total volume.The volume of the remaining commoditieslisted in Table 11 was small relative to thetotal shipments.

Information on the specific country ofdestination for each Canadian Lake port bytype of grain is reported in Appendix B. Ofthe direct overseas shipments from ThunderBay (Canada's largest grain port), the follow-ing countries received the majority of grainand sunflower seeds (in metric tons): USSR(294,139); Brazil (259,729); Holland (226,945);

Poland (92,240); and West Germany (87,048).These five countries received over three-quarters of the total direct overseas ship-ments from Thunder Bay. Although EasternCanadian ports received 75 percent of thetotal Canadian Great Lakes grain shipmentsin 1980, the specific country of destination ofthis grain is unknown.

In Summary

The volume of grain traffic over theGreat Lakes-St. Lawrence Seaway exceedsthat of any other major commodity group.During the 1978-80 period, grain shipmentsaveraged 43 percent of the traffic movingthrough the Welland Canal section of theSeaway. In 1980, grain shipments were 43.7percent of total Seaway traffic--the greatestpercentage in the history of the Seaway.During the same three-year period (1978-80),the allocation of total grain shipments aver-aged 52 percent for the U.S. and 48 percentfor Canada.

In 1980, 634.0 million bushels of grainwere shipped from U.S. Great Lake ports.Corn was the largest volume U.S. commodityshipped on the Lakes and when combined withwheat they accounted for some two-thirds ofthe total volume. Duluth-Superior was themost active port with over 363 million bush-els (57 percent of total U.S. Lake shipments)shipped, followed by Toledo with over 167million bushels shipped (26 percent of totalU.S. Lake shipments). The ports of Milwau-kee, Chicago, Huron, and Saginaw accountedfor the bulk of the remaining originatinggrain shipments.

In 1980, the two largest U.S. ports shippeddirectly overseas to the following countries(000 bu.): Spain (23,936); Italy (21,679); Hol-land (15,946); Venezuela (8,032); United King-dom (7,851); France (7,824); Japan (6,367);and Belgium (5,633). These eight countriesreceived over 70 percent of the total grainshipments from Duluth-Superior and Toledoin 1980.

Approximately 50 percent of all grainshipped from U.S. Lake ports moves to East-ern Canadian elevators. Virtually all of theU.S. grain shipped to Eastern Canadian (St.

17

TABLE 11

Canadian Great LakesGrain Shipments, 1980

(Metric Tons)

0 0

Ports & Destinations

Canada Great Lakes - TotalDirect OverseasGreat Lakes - CanadaSt. Lawrence

Thunder Bay - TotalDirect OverseasGreat Lakes - CanadaSt. Lawrence

Windsor, Ontario - TotalDirect OverseasGreat Lakes - Canada

Wallaceburg, Ontario -Total

St. Lawrence

Sarnia, Ontario - TotalDirect OverseasGreat Lakes - Canada

Goderich, Ontario - TotalDirect OverseasGreat Lakes •* Canada*3

St. Lawrence0

No. ofCargoes

943170

836121

26188

99

421626

3013125

141211

131110

Total

,795,987,602,063,166,995,026,929

,896,927,258,848,685,095,952,984

204,634107,33897,305

33,74833,748

406,161128,455277,706

254,508107,422106,88940,197

11

19

11

19

Wheat

,565,843380,118,588,047,597,678

,241,989380,118,315,048,546,823

78,762

78,762

10,65810,658

194,237

194,237

40,197

40,197

Corn

528,044332,250172,70423,090

—

114,91696,37318,543

23,09023,090

175,727128,45547,272

214,311107,422106,899

Oats

299,055109,22369,465120,367

299,055109,22369,465120,367

__

—

—

—

1

1

1

1

Barley

,52884298,145

,52884298,145

,203,245,823,135

,203,245,823,135

::

—

—

—

Rye

355,905315,1591,75938,987

355,905315,1591,75938,987

—

—

r-

—

—

Flaxseed

242187

55

242187

55

,941,322

,619

,941,332

,619

~

—

~

—

Rapeseed

172,113126,060

46,053

172,113126,060

46,053

::

—

«

—

Soybeans

47,06210,965a

36,197

—

10,965a

10,965a

—

36,197

36,197

—

Sunflower

5656

5656

,721,721

,721,721

::

—

::

—

includes 7,500 tons of soybean meal.Includes 7,500 tons of soybean meal.Includes: 9 cargoes to St. Lawrence - Canada; 1 cargo to St. Lawrence-U.S.; and 2 cargoes to Newfoundland, N.S.

cIncludes 5 cargoes (total amount) to Georgian Bay, Ontario.

Lawrence) ports ultimately moves to foreigncountry destinations. In 1980, Spain, Italy,USSR, Netherlands, United Kingdom, WestGermany, and East Germany received ap-proximately three-quarters of the total U.S.grain shipped from Eastern Canadian ports.

In Canada, a total of 14.8 million metrictons of grain was shipped from CanadianLake ports. This compares to 15.1 millionmetric tons shipped from U.S. Great Lakeports. Of the direct overseas shipments fromThunder Bay, the following countries re-ceived the major portion of grain and sun-flower seeds (in metric tons): USSR(294,139); Brazil (259,729); Holland (226,945);Poland (92,240); and West Germany (87,048).These five countries received over three-quarters of the total direct overseas ship-ments from Thunder Bay. The greatest vol-ume of Canadian grain exports originatesfrom Eastern Canadian ports (St. Lawrence),but the specific country of destination of thisgrain is unknown.

Although the main interest of this sectionwas to present descriptive data on the vol-ume, origin, and destination of grain flows onthe Great Lakes-St. Lawrence Seaway, someimportant observations are apparent. BothCanada and the U.S. constitute roughly equalgrain traffic on the Seaway. The shipment ofgrain from both U.S. and Canada is the singlemost important (in terms of volume) com-modity shipped on the Seaway. The relativeimportance of grain traffic has continued toincrease over the years and a simple extrapo-lation of historical traffic data suggests thatthe future economic role of grain shipmentson the Seaway will become increasingly im-portant.

HI. GRAIN EXPORT PROJECTIONSTO 1990

In this section annual trend projections bvmajor port area are made to the year 1990.The accuracy of projections beyond 1990 canbe seriously influenced by unforeseen changesin the factors affecting grain exports. Thesetrend projections are based on the assumptionthat future grain flows will correspond togrowth trends established during the period1974-81. Data prior to this period wasconsidered to be not indicative of currentconditions.

In many cases, grain export growth trendsin the various ports have shown either signifi-cant increases or decreases. In other cases,substantial year-to-year variations have oc-curred with no apparent trend established.Regardless of the nature of the data, linearprojections may tend to misrepresent the fu-ture. Alternatively, nonlinear projectionswere considered to better reflect grain ship-ment trends and, hence, were implemented inthis section.

Projection Methodology

The volume of grain flowing through U.S.port facilities is derived from the total vol-ume of U.S. grain exports. Therefore,changes in the expected level of U.S. grainexports and the location of the importingcountries will be the major factors affectingthe future quantities of grain handled atindividual ports.

A market share approach is used to pro-ject the quantities of grain handled at eachof four major U.S. ports: Lakes, Atlantic,

Annual forecasts are made in full recogni-tion that seasonal variations in export vol-umes exist. An implicit assumption madehere is that the historical seasonal patternsare expected to obtain in the future despiteabsolute changes in the annual shipments.

Grain is defined to include: wheat, rye,corn (yellow and white), oats, barley, sor-ghum, soybeans, and flaxseed. The projectedmarket shares do not include sunflower seeds.

19

Gulf, and Pacific. Total U.S. grain exportprojections have been made to the year 1990(see Table 12). These figures are based on awealth of information regarding the worldagricultural supply and demand situation.However, these figures include some exportswhich move across inland borders and there-fore are not relevant to this study. In orderto adjust these figures to reflect only exportsfrom ports, the historical relationship be-tween the four port totals of Table 13 andthe total exports of Table 12 was examined.The percentage of the total that is made upof port exports (i.e., four port total/totalexports) was regressed against time so thatthis percentage could then be projected to1990. The projected percentages were thenapplied to the figures in Table 12 to producethe projected four port total in Table 13.

Individual port shares of the four porttotal were projected to the year 1990 basedon a nonlinear relationship between portshare (PS) and time (t). Data from 1974 to1981 were used to statistically estimate theparameters of the relationship, PS = a t$ .The resulting equation was then used to pro-ject port share for each port to 1990. The

TABLE 12

U.S. Exports of Wheat, Coarse Grains,and Soybeans with Forecasts to 1990

Data source for grain exports by port:USDA, Grain Market News.gData source for total U.S. grain export pro-

jections: MSU Agriculture Model, "A Fore-cast of Grain and Soybean Exports to theYear 2000," Department of Agricultural Eco-nomics, Michigan State University, SpecialReport, July 1981.9The statistical model selected for projecting

port shares was based on a comparison of thefollowing three functional forms: linearPS = a+3 t; nonlinear PS = at $; andlogarithmic-reciprocal In PS = a+3 (1/t) .Although minor differences were observed inthe statistical significance of the estimatedparameters, some notable differencesoccurred in the projections. Based on theauthors' knowledge of the problem and theability of the models to explain recent ship-ment volumes, the nonlinear or log linearmodel was selected to best represent thefuture.

CropYeara

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

Wheat

728.3

598.3

1115.3

1213.9

1015.5

1170.9

947.8

1121.4

1193.3

1373.0

1510.0

1798.6

1704.6

1631.0

1588.0

1592.8

1700.0

1778.1

1869.4

1956.4

2051.2

CoarseGrains Soybeans0

(Million Bushels)

718.2

937.5

1507.5

1591.8

1394.4

1951.6

1979.5

2203.4

2357.5

2806.2

2719.6

2581.8

2499.2

2711.7

2912.4

3038.4

3203.7

3447.7

3778.3

4097.1

4439.5

433.8

416.8

479.4

539.1

420.7

555.1

564.1

700.5739.0

875.0

724.0

887.8

892.4

890.5

908.6

912.0

950.3

978.6

1015.2

1058.6

1118.2

Crop year: wheat and corn, 3uly-3une; andsoybeans, October-September.

Coarse grains include: corn, oats, barley,and sorghum.

cDoes not include soybean oil or soybeai.meal.

Source: "A Forecast of U.S. and World Agri-culture to the Year 1990," MSU AgriculturalModel, Quarterly Report, Dept. of Ag. Econ.,Mich. State Univ. (Spring 1982), p. 106.

20

TABLE 13

Annual Grain and Sunflower Exportsby Port Area with Forecasts to 1990

Lakes

YearGrain Sunflowers Total Grain % Including

Mil. Bu.b Mil. Bu.c & Sunflowers Sunflowers

Atlantic

Mil.Bu.

102.4

94.3

226.9

389.1

362.4

430.8

534.5

462.1

507.8

585.8

528.8

515.6

538.0

543.9

554.3

560.7

585.1

513.2

651.7

688.8

730.2

%

5.61

5.53

9.79

1.1.08

12.53

13.57

14.92

13.55

11.84

32.56

10.72

10.48

11.30

11.13

10.99

10.86

10.75

10.68

10.55

10.47

10.39

Gulf

Mil.Bu.

1,147.1

1,114,3

1,500.9

2,250.3

1,834.9

2,041.8

2,329.0

2,222.5

2,617.3

2,779.7

2,909.6

3,034.4

2,864.0

2,918.2

2,995.0

3,049.5

3,201.2

3,373.9

3,604.3

3,828.5

4,077.0

%

62.81

65.33

64.73

64.07

65.15

64.29

65.00

65.19

61.03

59.61

59.00

61.65

60.13

59.75

59.40

59.07

58.81

58.78

58.38

58.19

58.02

Pacific

Mil.Bu.

257.2

192.8

254.0

398.0

360.9

366.4

387.9

316.8

517.1

689.1

917.9

898.2

768.4

809.6

856.7

897.2

966.7

1,043.8

1,140.7

1,237.7

1,344.8

%

14.08

11.30

10.95

11.33

12.47

11.54

10.82

9.29

12.06

14.78

18.61

18.25

16.1.3

16.53

16.99

17.38

17.76

18.19

18.48

18.81

19.14

Total (Includ-ing Sunflowers)

Mil. Bu.

1,862.2

1,705.7

2,318.7

3,512.1

2,893.1

3,175.7

3,583.1

3,409.5

4,288.7

4,663.3

4,931.5

4,921.5

4,762.7

4,884.3

5,042.1

5,162.7

5,443.4

5,739.7

6,173.8

6,579.1

7,027.2

%

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

319.5

304.3

336.9

474.7

271.9

320.4

309.1

366.1

555.0

510.5

476.9

389.8

477.2

439.3

505.2

517.2

545.6

557.7

619.9

661.2

706.8

NA

NA

NA

NA

13.0

16.3

22.6

42.0

91.5

98.2

98.3

83.5

115.1

123.3

130.9

138.1

144.8

151.1

157.2

162.9

168.4

319.5

304.3

336.9

474.7

284.9

336.7

331.7

408.1

646.5

608.7

575.3

473.3

592.3

612.6

636.1

655.3

690.4

708.8

777.1

824.1

875.2

17.50

17.84

14.53

13.52

9.85

10.60

9.26

11.97

15.07

13.05

11.67

9.62

12.44

12.54

12.62

12.69

.12.68

12.35

12.59

12.53

12.45


Does not include sunflower seed shipments.

'Sunflower seeds weight 28 lbs./bu.

21

four port total was allocated to each of thefour ports based on this estimated marketshare.

exceed the rates of growth of grain ship-ments during the coming decade.

Historical Export Volumes

During the period 1974-81 (post Sovietgrain deal), the average port shares of grainexports (including sunflower seeds) were:11.4 percent Lakes; 12.5 percent Atlantic;62.6 percent Gulf; and 13.5 percent Pacific(see Table 13). Some interesting trends inport shares during the last decade are ap-parent in Table 13. While the Lake share oftotal exports declined during the early 1970s,during the period from which projectionswere made (1974-81), the Lakes share oftotal U.S. exports remained relatively stableat about 11.5 percent. On the other hand,the Atlantic share of total exports approxi-mately doubled during the early 1970s andthen remained relatively constant at about12.5 percent during the period from whichprojections were made. The Gulf ports alsoexperienced a very modest increase in mar-ket share during the early 1970s, but experi-enced a gradual decline in its market shareduring the late 1970s. Finally, the Pacificcoastal port market share declined somewhatduring the early 1970s, but experienced agreater gain in market share during the late1970s than any of the four coastal ports. Therecent increase in the Pacific coastal portmarket share seems to be at the expense ofeach of the other three port areas withperhaps the Gulf port experiencing the great-est effects of the rapidly escalating Pacificcoast export volumes.

The importance of sunflower seed ship-ments as a component of total Great Lakegrain shipments is apparent from the infor-mation presented in Table 13. Since 1974,sunflower seed shipments have increased over600 percent, from 13.0 mil. bu. to 98.3 mil.bu. in 1980. This extraordinary growth in theexport of sunflower seeds from Lake portshas contributed substantially to the totalvolume of agricultural exports from Lakeports. During the last five years, sunflowerseeds have constituted some 15 percent oftotal grain and sunflower Lake exports. Ex-pected rates of growth in sunflower seedshipments at Lake ports are expected to

Future Export Levels

In the future, some interesting growthprojections are observed. For all port areas,absolute levels of increase in grain exportsare expected through 1990. However, therelative market share of each port differs asthe future develops (Table 13).

As a baseline for comparison, the mostrecent three-year average (1979-81) is used.For grain and sunflower seeds, these baselinefigures are: total, 4,838 million bushels;Lakes, 552 million bushels (11.4 percent);Atlantic, 543 million bushels (11.2 percent);Gulf, 2,908 million bushels (60.1 percent); andPacific, 835 million bushels (17.3 percent).By the year 1990, total grain exports areprojected to increase by 45.2 percent to7,027.2 million bushels. In the four coastalports, expected percentage increases in grainshipments by 1990 are: Lakes, 58.0 percent;Atlantic, 34.4 percent; Gulf, 40.2 percent;and Pacific, 61.0 percent. The greatest per-centage increase in grain exports can beexpected at the Pacific ports followed by theLake ports. The smallest percentage in-crease can be expected to occur at theAtlantic ports. Notwithstanding the greatestabsolute volume increase occurring at theGulf ports, their percentage increase is ex-pected to be 40.2 percent. All ports willexperience substantial growths in grain vol-umes, but a relatively larger share of totalU.S. grain exports can be expected to movethrough the Pacific and Lake ports.

Projected sunflower seed exports contri-bute substantially to the expected increase inagricultural exports through the Lake ports.With the addition of sunflower seed exportprojections, the Lake ports will challenge thePacific ports in achieving the most rapidgrowth in exports. Clearly, the Lake portscan expect a sizable growth in grain andsunflower exports over the next decade.

It should be borne in mind that the pro-jected shares of total U.S. grain exports arebased upon nonlinear projections of historicalpatterns. Inherent in these historical

22

patterns are changes in the country of finaldestination that may have occurred duringthe 1974-81 period. Notwithstanding pro-jected growth in total U.S. grain exports, theglobal location of final demand for theseexports has important implications for futureU.S. port growth. A discussion of the desti-nation of grain exports will be given in Sec-tion VI.

Another possible factor that may affectthe port shares of future exports is thederegulation of rail rates. Since the StaggersRail Act didn't pass until 1980, the effect ofderegulation is not captured in the sampleperiod used here. If unit trains to the Atlan-tic coast ports become more economical, theprojection here for the Lakes ports may beoverly optimistic. Any unforeseen institu-tional change will have an effect on portshares that can't be predicted by the projec-tion method used here.

IV. PORT CAPACITIES

Projected grain exports for each of thefour major port areas were shown in theprevious section (Table 14). The shares ofexports for the Pacific and Great Lakes portsare projected to increase through 1990, whilethe shares for the Gulf and Atlantic ports areprojected to decrease. In absolute termsthough, the volume of exports passingthrough all the ports will be increasing overthe next few years. This prediction leads oneto ask whether the ports have the capacity tohandle the increased traffic and still main-tain an acceptable level of performance.

Port capacity is difficult to assess andeven harder to predict. It depends on avariety of factors which are influenced byboth private and public actions. Predictingfuture port capacities would require knowl-edge of port development policies of publicagencies as well as private sector responsesto anticipated economic conditions. In theabsence of reliable predictions of future portcapacities, an attempt will be made here toassess current port capacities and how theycompare to grain export projections.

Port capacity can be defined in a numberof ways. There is a limit to the rate at whichgrain can be unloaded from inland carriers atthe port and a limit to the rate at whichgrain can be loaded onto ships. There is alsoa storage capacity constraint in elevators.Dezik and Fuller (1979) have compiled portstorage capacities and found them to begreatest on the Great Lakes and least on theAtlantic:

TABLE 14Grain Storage Capacity by Major Port

Port

Great LakesGulfPacificAtlantic

Port Storage Capacity(Million Bushels)

131.2112.552.240.3

Source: Dezik, Jack and Stephen Fuller, U.S.Grain Ports: Location and Capacity, TexasAgricultural Experiment Station, PR-3593,October 1979.

23

Port storage capacity, however, is not usuallythe limiting factor. Other factors includeship loading rates, draft at elevator, abilityto handle more than one ship simultaneously,unloading facilities at the port, and numberof shifts that are worked. When all of thesefactors are taken into consideration, the esti-mates of throughput capacity differ greatlyfrom the elevator storage capacities. In1975, the U.S. Maritime Administration esti-mated the average practical throughputcapacities as follows:

TABLE 15Grain Throughput Capacity by

Major Port Area

Port


Average PracticalThroughput Capacity

(Million Bushels)

5542,274765523

Source: U.S. Maritime Administration,National Port Assessment, 1980-1990, U.S.Dept. of Commerce, 3une 1980.

When these were combined with their 1975forecasts of exports to 1990, it indicated aneed for three new grain terminals in theGreat Lakes area and seven additional facili-ties in the Gulf area (U.S. Maritime Adminis-tration, 1980). Alternatively, using the fore-casts of grain exports previously presented(Table 13) and the above estimates ofthroughput capacity (Table 15), there wouldappear to be a need for additional capacity atall the ports by 1990. However, a later studyby Gaibler (1979) gives a different indicationof port throughput capacity. Gaibler esti-mated capacity in two ways. The first is anindication of capacity based on peak exportvolumes in the past, i.e., what we know is apossible capacity. The second is an engineer-ing estimate based on ship loading rates ofport elevators, or what is technically a possi-ble capacity. Both estimates are given asfollows:

TABLE 16Grain Export Capacity Based on PeakVolumes and Technical Considerations

by Major Port Area

Port


Total

CapacityBased on

Peak ExportVolumes

EngineeringCapacityBased on

AggregateLoading

Rate/Year(Million Bushels)

5522,964828696

5,040

1,8242,8561,464984

7,128

Source: Gaibler, Floyd D., The Transporta-tion System's Capacity to Meet Grain ExportDemand, 1979/80 Outlook, ESCS, USDA,October 1979.

The engineering capacity of the GreatLakes port area is well above what the peakvolumes indicate (Table 16). The Gulf portareas, though, show less engineering capacitythan what has actually existed during peaktimes. This seemingly erroneous result is dueto the fact that the engineering capacity inTable 16 does not consider the possibility ofmultiple shifts by workers, which is oftendone in the Gulf area during times of peakexport volume. Therefore, it is possible thatthe engineering capacities above are under-stated. However, these figures are alsobased on manufacturers' estimates of equip-ment capacity operating under ideal condi-tions (Gaibler, 1979), which may overstatethe true capacity under more realistic condi-tions. In light of both of these factors, theengineering capacities from Table 16 shouldbe regarded as rough estimates. Neverthe-less, it is felt that these engineering esti-mates are more appropriate for the purposesof this report than the estimates based onpast peak volumes. In order to know if portcapacity is going to be a problem in thefuture, one needs to know the potential capa-cities of each port. Therefore, the

24

engineering capacities of Table 16 are usedas an indication of port throughput capacity,with the understanding that they can be ex-panded by multiple shifts, at least in theshort-run.

When the export projections of Table 13are compared to the engineering capacitiesof the ports at the present time, only theGulf port will need additional capacity.Some of the additional capacity is beingprovided at the present time by workingmultiple shifts. If we allow for even modestgrowth in port capacities over time and as-sume that multiple shifts will continue to bea practice, it does not appear that portcapacity will be a serious constraint through1990. The Gulf port, however, will be oper-ating closest to capacity levels and any dis-ruptions in the system (e.g., labor strikes orvessel shortages) could lead to overflow con-ditions and diversions through other ports.

While Great Lakes port capacity is gener-ally acknowledged to be adequate, the LewisDreyfus Corporation has questioned the capa-city of the St. Lawrence River deep waterports to handle future increases of exports(Seaway Review, 1981). Their estimate ofcapacity for these ports is 845 million bushelsand they reported that some of these portsare operating at capacity already. The Drey-fus Corporation, however, predicts a muchlarger export volume for the Great Lakesthan the 1990 export projection made here of875.2 million bushels. Of this volume, only aportion will be transshipped through the St.Lawrence River ports. The 168.4 millionbushels of sunflowers which are included inthis total would be shipped directly fromDuluth/Superior to the overseas destination,without any use of the St. Lawrence Riverports. This is due to the fact that sunflowershave a high bulk to weight ratio and can fill aship at a Great Lakes port without exceedingthe shallow draft limitation of the Seaway.Of the remaining 706.8 million bushels ofgrain projected for 1990, a portion will godirectly to overseas destinations and the re-mainder will be transshipped. In 1981, theportion which was transshipped was 58 per-cent of the total U.S. Great Lakes exports.While this portion varies from year to year,the highest it has been since 1970 is 67percent of total grain exports. The averageportion which was transshipped through St.

Lawrence ports since 1970 is 49 percent.

If we apply a 50 percent factor (to reflectthe average) to the total projected grainexports going through the Seaway in 1990, wewould predict that a capacity for 353.4 mil-lion bushels of U.S. grain will be needed atSt. Lawrence River ports. To this must beadded the capacity that will be needed forCanadian grain which will be transshippedthrough the deepwater St. Lawrence ports.The Dominion Marine Association (March1978) projected that 394.7 million bushels ofCanadian grain would move by laker to theAtlantic (Seaway) ports for export. If theseare added together, the resulting 748.1 mil-lion bushels of grain leaves a relatively largemargin for error when compared to the Drey-fus estimated throughput capacity of 845million bushels. However, there exists aninstitutional constraint which may limitthroughput capacity at the St. Lawrenceports. The Canadian Wheat Commission re-quires that only 40 percent of Canadian St.Lawrence elevator storage capacity be usedfor U.S. grain at any one time (U.S. MaritimeAdministration, 1982). The interdependencebetween U.S. and Canadian exports cannot beignored when attempting to project exportsthrough the St. Lawrence Seaway.

In summary, port capacity does not ap-pear to be a major obstacle to increasingexports of grain through any of the ports inthe near future. It is clear that the Gulf portis operating nearest to capacity levels and istherefore more sensitive to any stresses inthe system. However, Gulf port elevatormanagers do not feel that capacity will be amajor problem in the near future. The portfacilities themselves appear to be adequate.We expect most obstacles in the futuremovement of grain exports to come fromother sources, as discussed in followingsections.

25

V. SHIPPING RATES route through the Gulf ports was the nextmost attractive alternative.

Exports of grain can be shipped fromGreat Lakes ports by a variety of transporta-tion modes and routes. Relative prices andterms of contracts will determine the combi-nation of modes chosen from any point oforigin to the overseas destination. There arethree major ways to transport grain from theupper Midwest ports for export by oceanvessels. Grain can be transported by rail toeither Atlantic or Gulf ports. It can also goby barge to Gulf ports. Finally, grain canmove by lakers, through the Great Lakes andSt. Lawrence Seaway, to ocean ports on theSt. Lawrence River. All of these routesrequire reloading onto an ocean vessel for theoverseas shipment. A fourth alternative,which does not require reloading, is the oceanvessel which can pass through the St. Law-rence Seaway and the system of locks to theGreat Lakes ports, and take grain from theseports directly overseas. There is a maximumsize of ship that can be used for this alterna-tive (730' length, 76' beam), and even then,most ships cannot take a full load out throughthe Seaway, but instead, must "top-off" oncethey get through the shallow lock system(Sussman, 1978). Nevertheless, about 48 per-cent of the grain moving out of the St. Law-rence Seaway in 1981 was moved by oceanvessels and the remainder was transported bylaker (The St. Lawrence Seaway Authority,1982).

In order to compare the economic viabili-ty of the Great Lakes transportation routewith the alternative routes, some selectedrates for transporting grain overseas wereexamined. The major Great Lakes grainexporting ports of Duluth/Superior, Chicago,and Toledo were chosen for analysis.

There are various other studies whichhave done similar analyses of transportationrates for grain going from Great Lakes portsto European destinations. In 1978, the U.S.Maritime Administration examined the rela-tive shipping costs of the same three portsconsidered here. Their results showed that inall three cases the route through the St.Lawrence Seaway by laker, then ocean ves-sel, was the most economical (U.S. MaritimeAdministration, 1978, pp. k7-57). The barge

In 1981, the Great Lakes Commissionfunded a study which included an analysis ofgrain transportation rates (Great Lakes Com-mission, 1981). Their study, using rates fromAugust 1981, showed different results foreach of the three ports. From the Minneapo-lis/Duluth area, the most economical routewas by barge to the Gulf and Jthen by oceanvessel to Europe. A saltie which wouldtake grain directly from Duluth to Europewas the next best alternative. For theChicago area, grain could most economicallygo by rail to Baltimore and then across toEurope. The second best alternative forChicago was the barge route through theGulf. From Toledo, the laker route throughthe St. Lawrence ports was the most attrac-tive alternative, while the barge route wasagain second best. It is apparent that thethree years that lapsed between the twostudies resulted in a substantial change inrelative rates. It is also possible that themethods used for deriving the rates variedbetween the two studies.

In 1980, the USDA conducted a studywhich compared grain transportation ratesfor various modes going from Readlyn, Iowaand Cottage Grove, Wisconsin to overseasports. The port of Milwaukee was assumed tobe the Great Lakes port that would be used.This study differed from the other two inthat elevator handling charges and transpor-tation to the Great Lakes port were includ-ed. The results showed that grain movingfrom Readlyn, Iowa to Rotterdam could mosteconomically move by unit train to the Gulf,

A "saltie" is a vessel designed for oceantravel while a "laker" has a hull designed forthe smaller waves of the Great Lakes.

In the other studies, only rates for shippingthe grain from the major port area to theoverseas destination were included. Becauseof the high volume of grain that goes throughthe ports of Duluth, Chicago, and Toledo, itis useful to compare rates only from thesemajor ports, abstracting from the actual ori-gin of the grain.

26

then be loaded onto ocean vessels. Thesecond best alternative was to transport thegrain by barge to the Gulf ports. When thefinal destination was the Russian Black Seaports, the most economical route was throughthe St. Lawrence Seaway, using a directocean vessel that topped off at the St. Law-rence ports. This was nearly $2.00/toncheaper than going by unit train to the Gulf.For grain originating at Cottage Grove, Wis-consin, the cheapest route to Rotterdam wasthrough the St. Lawrence Seaway again, usinga topped ocean vessel. The next best alter-native would have been to use a laker tomove the grain to the St. Lawrence ports andthen transship by ocean vessel. When theRussian Black Sea ports were the final desti-nation, the topped ship rates were still thelowest, with the laker alternative next.

While it is interesting to compare theresults of these studies with other resultswhich follow in this report, the most impor-tant point to bear in mind is the variability ofthe rates. Part of this variability stems fromthe competitive nature of the system, butpart of the apparent variability comes fromthe many possible sources of information onrates. These previous studies have differentassumptions and sources and therefore it isnot legitimate to compare the results direct-ly.

For the following analysis, rates quoted oractually charged since the opening of theSeaway season (April-May) through Septem-ber 1982 are used to make comparisons. Dueto different terms of contracts and othervariables, rates are not always directly com-parable, even within the same transportationmode (e.g., rail rates from Chicago may havedifferent minimum carloads than the ratescited from Toledo). The terms and minimumsaccompanying the rates should be noted care-fully. It also should be stressed that graintransportation rates fluctuate constantly andare subject to the pressures of a competitivemarket. When an excess number of cars,barges, and ships are present, rates can bebid down quite low. Also, if a large shipmentcan be guaranteed, the shipper will be able tocontract for a better rate than that which isquoted for smaller shipments. In general, itis not possible to find a single rate which

applies to all shipments by a particular modeof transportation. The rates used here shouldbe viewed as representative rates for grainshipments in 1982.

Duluth/Superior Rates

The water route from the Duluth/Superiorport can be compared to the rail and bargeroutes from Minneapolis/St. Paul. The graincoming into the terminal facilities atDuluth/Superior could alternatively go to thefacilities on the Mississippi River atMinneapolis/St. Paul for about the same in-land rate (U.S. Maritime Administration,1978, p. 22). Therefore, there are four possi-ble ways for the grain to be exported. It cango by rail to the Atlantic ports, by rail to theGulf ports, by barge to the Gulf ports, or byvessel through the Great Lakes and Seaway.Figure k shows the alternative routes and therates associated with each. Rotterdam wasused as the final destination point from allthree ports and 1982 rates are cited.

The rail rates from Minneapolis/St. Paulare $41.00/ton to the Gulf and $42.00/ton tothe Atlantic ports. Figure k shows that theserates are quite high relative to the barge andvessel rates. This finding is in agreementwith the 1978 study (U.S. Maritime Adminis-tration, 1978) and shows that the rail route inthis case would be unattractive except inwinter when the water routes are closed.

The barge rate from Minneapolis/St. Paulis based on a benchmark that is used on theMerchants Exchange of St. Louis where bargecontracts are traded. The benchmark rate of$6.19/ton has been in effect for many yearsand barge owners can no longer run a profita-ble business at this rate (Grain Transporta-tion Situation, July 26, 1982). However, dueto the extreme overcapacity conditions thatare now present, barge rates have been run-ning anywhere between 110-180 percent ofthe benchmark. For comparison, in Septem-ber of 1980, barge rates were around 300percent of tariff. While we would expect tosee much higher barge rates in the future,due to either increased traffic or fewer oper-ators, we have used an average rate forMarch through August of $8.85/ton to reflectthe 1982 situation.

27

Figure 4-

Grain Shipment Rates FromDuluth/Superior to Rotterdam

St. Lawrence $8.42/ton Rotterdam

St. PauMinneapoli

$9.18/ton

Sources:Laker Rates:Ocean Rates:Rail Rates:Barge Rates:

Vessel AgentsMarAd Office of Trade Studies, Vessel Agents, and Grain Transportation SituationMinneapolis Grain Exchange, for grains, 1,000 ton minimumConsolidated Grain and Barge Company

28

The laker rate is quoted by vessel agentsfor a laker which transports the grain fromDuluth/Superior through the "Soo" locks,through the Welland Canal and the Montreal-Lake Ontario locks, and finally to one of thedeep water ports on the St. Lawrence River.Some of this grain is then used to top-offocean vessels coming from the Great Lakes,and some is loaded onto the larger oceanvessels that come into these ports. The lakerrates tend to be more stable than the bargerates (U.S. Maritime Administration, 1978),but they are still relatively low due to over-capacity at this time. The rate used here of$9.6I/ton does not include the Seaway toll of$0.79/ton that is charged for passage throughthe combined sections of the Welland Canaland Montreal-Lake Ontario locks. Table 17,which compares the total charges for alter-native routes, includes this toll.

The rates above must be added onto theocean rates which are for the transport ofgrain overseas to Rotterdam. Like the otherrates, the ocean rates are currently de-pressed due to overcapacity at the ports. Inthe Gulf area, there have been more shipsarriving with cargo than leaving with exports,and a build-up of ships there has led to ratesas low as $5.00/ton (USDA, Grain Transpor-tation Situation, July 12, 1982). These ratesvary widely, however, and a weighted aver-age from April to October 1982 of $9.18/tonhas been used here. A similar average wasused for the Atlantic ports, which was$9.93/ton, although rates as low as $5.00/tonwere also recently cited there. The oceanrate from the St. Lawrence Seaway to Rot-terdam was more difficult to calculate,since there is a top-off rate as well as a ratefor vessels which load completely at theseports. The top-off rates, however, were notaveraged in here since they apply to muchsmaller ships which go through the Seaway.It should also be noted that most oceanvessels leaving the St. Lawrence Seawayports are smaller than those using the Gulf orAtlantic ports, although some are in the60,000+ DWT (Dead Weight Tons) category.In spite of this, the weighted average of$8.42/ton is still less than either the Gulf orAtlantic rates.

The final shipping alternative forDuluth/Superior is to transport grain directlyoverseas in an ocean vessel through the Sea-

way. An ocean vessel can carry out a maxi-mum of around 23,000 tons to the lower St.Lawrence River where it can top-off to capa-city (St. Lawrence Seaway Development Cor-poration, 1981). Again, the rate charged willdepend on the size of the vessel and theavailability of vessels. The number of oceanvessels which are available at the GreatLakes ports have historically been a functionof the amount of manufactured steel prod-ucts that the Great Lakes area is importing.The two-way trade possibility of steel prod-ucts for grain has been what attracts theocean vessels to the Great Lakes ports (U.S.Maritime Administration, 1978). The amountof steel products imported has varied overthe years, especially in response to the steelprice triggering mechanism designed to pre-vent dumping of steel products in the U.S.

TABLE 17Grain Shipment Rates from

Duluth/Superior to Rotterdam

Laker, thenocean vessel

Ocean vesselthrough Seaway

Rail to Atlantic,then ocean vessel

Rail to Gulf,then ocean vessel

Barge to Gulf,then ocean vessel

$19.01/tona

$20.04/tona

$M.93/ton

$50.18/ton

$18.03/ton

With toll.

The rates were weighted by vessel size. Byusing a weighted average like this, the resultcan be interpreted as the rate which wasmost likely to have been charged for theshipment of a ton of grain during this period.

29

Depending on the situation in other markets(e.g., steel), the availability of ships may be aconstraint on the amount of grain that can beshipped via the Seaway.

Almost all rates quoted for ocean vesseltransport of grain from Duluth/Superior toRotterdam were for between 15,000-20,000ton basis vessel size. The weighted averageof these rates was $19.25/ton.

Combining all of the above rate informa-tion for the Duluth/Superior port, the fivealternative means of transporting grain toRotterdam are compared in Table 17. Thebarge to the Gulf route is the most economi-cal, while the two Great Lakes alternativeshave the next lowest rates. The rail routesare considerably higher through either port,and would predominantly be a winter route.It should be stressed, however, that these railrates can vary substantially depending on theterms of the contract.

While the barge route appears most eco-nomical, the Great Lakes routes must beconsidered as competitive alternatives. Thebarge rates are likely to fluctuate much morethan the laker or ocean rates, and a return tothe 300 percent of tariff rate for bargeswould increase the cost of this route substan-tially. The time in transit for these twoalternatives should also be considered.Barges usually take about three weeks to gofrom Minneapolis/St. Paul to the Gulf, whilean ocean vessel might make the entire trip toRotterdam from Duluth/Superior in slightlyless than that time. Unit trains can also savetime over the barge route, but the extra costmust be considered.

Chicago Rates

A similar analysis of rates was conductedfor the Port of Chicago. The rail rate to theAtlantic of $13.06/ton and the rate to theGulf of $12.69/ton are based on differentminimums which are detailed in Figure 5.The barge rate is again an average for 1982of $8.05/ton from Chicago to the Gulf. Thelaker rate was quoted by vessel agents indollars per bushel and it is assumed that mostshipments from Chicago are corn. The oceanvessel rate through the Great Lakes is based

TABLE 18

Grain Shipment Rates fromChicago to Rotterdam




Rail to Gulf,then ocean vessel


$19.66/tona

$21.74/tona

$22.99/ton

$21.87/ton

$17.23/ton

aWith toll.

on actual rates quoted by vessel agents dur-ing 1982. The ocean rates from the deepwater ports are the same as before andFigure 5 summarizes the rate information.The combined rates in Table 18 show a muchmore competitive rail route from Chicagothan that from Minneapolis/St. Paul. In fact,all the routes except the barge route arereasonably similar in terms of their rates.The barge route is still the cheapest, butagain, the stability of this rate and theseasonality of this route and the St. Law-rence Seaway route must be considered. Therapid transit time of unit trains for trans-porting grain to the Atlantic ports adds tothe attractiveness of that alternative. TheGreat Lakes route would also show goodtransit time relative to the barge route.

The grain transportation situation inChicago appears to be one of good competi-tion between the alternative modes of trans-portation, although the barge mode enjoyedan advantage in 1982. Small changes in thestructure of rates or terms of contracts forany of these modes could affect the relativecompetitive position of each. If the domestictransportation system were operating nearcapacity, there is every reason to believethat the Great Lakes route would be acompetitive alternative for the export ofgrain from Chicago.

30

Figure 5

Grain Shipment Rates FromChicago to Rotterdam

St. Lawrence $8.42/ton Rotterdam

Direct OceanVessel - $20.95/tonLaker - $10.45/ton

Chicago t

$13.06/ton

Barge -$8.05/tonRail -$12.69/ton

Sources:Laker Rates:Ocean Rates:Rail Rates:

Barge Rates

Vessel AgentsMarAd Office of Trade Studies, Vessel Agents, and Grain Transportation SituationChicago Board of Trade; Atlantic rate for grains and soys, 45 consecutiveshipments, 9,800 tons/shipment, not more than 100 covered hoppers/shipment,shipper-owned equipment; Gulf rate for grains and soys, 5 consecutiveshipments, min. 11,500 tons/shipment, annual shipments of 598,000 tons, min.,shipper-ownedConsolidated Grain and Barge Company

31

Toledo Rates Shipping Rate Summary

The situation in Toledo is similar to thatin Duluth/Superior in the sense that the portfacilities can compete with inland facilitiesat Cincinnati for grain shipments. The Cin-cinnati to the Gulf route uses the Ohio andMississippi Rivers and is also experiencingdepressed barge rates. The barge rate of$5.95/ton is again an average for 1982. Therail rate from Toledo is $11.14/ton and thelaker and ocean rates are from the samesources as the Chicago rates, see Figure 6.The four alternative routes shown in Table 19show that the Toledo situation is very similarto that of Chicago. The rail rate is againsomewhat competitive, due to the short dis-tance to the Atlantic ports. The barge routeis still the cheapest and the Seaway routesnext. The rail route could easily becomevery competitive if the overcapacity thatexists results in depressed rail rates, as it hasdone for barge rates. The Lakes route wouldbecome a more attractive alternative if someof the overcapacity conditions on the inlandtransportation system were to ease, therebyraising those rates.

TABLE 19

Grain Shipment Rates fromToledo to Rotterdam





$17.97/tona

$19.12/tona

$21.07/ton

$15.13/ton

The results presented in this section indi-cate that grain exports from Great Lakesport areas to Rotterdam can most economic-ally be shipped by barge to the Gulf, then byocean vessel to Rotterdam. However, thisresult can be attributed to the extremely lowbarge rates which exist as a result of overca-pacity on the Mississippi River system.These rates cannot remain in effect for longbefore some barge operators begin to go outof business. As barge rates rise, the GreatLakes route will become an attractive alter-native for the export of grain, especiallyfrom the Duluth/Superior port. The Lakesroute will also be competitive from theChicago and Toledo ports, although railroutes must be considered as viable alterna-tives from these ports. The results from thisstudy can be compared to the results of the1978 study by the U.S. Maritime Administra-tion. That study showed the Great Lakesroute to be the most economical in all threecases, while the barge routes were the secondalternative. The difference in results be-tween the two studies shows the impact thatchanging capacity conditions (from possibleoverinvestment in the inland transportationsystem) can have on the relative competi-tiveness of the alternatives in this system. Inlight of the variability of transportation ratesfor grain export, no firm conclusion can bereached as to which transportation mode orroute will be most economical in the future.It is clear that the barge to the Gulf routeshave been the most economical for the firsthalf of 1982, and the volumes of grain whichhave moved through the Gulf already in 1982indicate that shippers are taking advantageof this savings (Grain Transportation Situa-tion, September 27, 1982). It can be conclud-ed, however, that the Great Lakes route hasthe potential to be a competitive transporta-tion alternative during most of the year andany improvements in this route should lead toan increased share of the grain export trafficfor the Great Lakes.

lWith toll.

32

Figure 6

Grain Shipment Rates FromToledo to Rotterdam

St. Lawrence Rotterdam

Direct OceanVessel - $18.33/tonaker - $8.76/ton

Sources:Laker Rates:Ocean Rates:Rail Rates:

Barge Rates:

Vessel Agents and Toledo Port AuthorityMarAd Office of Trade Studies, Vessel Agents and Grain Transportation SituationChicago Board of Trade, for grains and soys, 45 consecutive shipments,9,800 tons/shipment, not more than 100 covered hoppers/shipment,shipper-owned equipmentConsolidated Grain and Barge Company

33

VI. OTHER FACTORS AFFECTING THERELATIVE COMPETITIVENESS

AMONG GRAIN SHIPPING PORTS

There are many other variables besidesrelative rates and port capacities which af-fect the movement of grain to export mar-kets. Some of these are constraints on theSeaway system and some are constraints oncompetitive routes which could lead to in-creased volume for the Seaway route. A fewof these factors will be briefly introducedhere, since considerable study and analysiswould be necessary to evaluate the actualimpact of each. Some references where suchanalysis has been done will be cited.

1979 were averaged. The resulting averagefuel efficiency for barges was 460 ton-milesper gallon (see Table 20).

Comparison of Energy Efficiency AmongTransportation Modes

Sharp increases in fuel prices during the1970s has brought increasing concern aboutthe energy efficiency of the transportationsystem. Given that interest in this area isexpected to continue through the 1980s, it isuseful to compare the energy efficiencies ofrail, barge, and Great Lakes vessel transpor-tation of agricultural commodities.

Numerous studies are available on thefuel efficiency of the domestic transporta-tion system. The findings of these studiesvary widely, especially with respect to bargetransportation. For example, a Departmentof Transportation study published in 1976(Eastman, 1980) reported that a lowerMississippi barge traveling downstream couldget 1,347 ton-miles per gallon. In contrast,a study from 1973 (Schenker, et al., 1976)states that an average barge can get 250 ton-miles per gallon. It is clear that there are anumber of variables which can affect the fuelefficiency of barges, and comparison acrossstudies is difficult. In order to arrive at onefigure of fuel efficiency that could be com-pared to the efficiency of other modes, theton-miles per gallon for barges reported since

Energy

Mode

Rail

Unit Train

Barge

Great LakesVessel

TABLE 20Efficiency Across Modes

Ton-Milesper Gallon

228

350

460

600

Ton-Milesper GallonAdjusted

for Circuity

153

235

286

476

The adjustments are based on factors fromEastman (1980). The rail factor is an averagebased on 10 routings from Minneapolis to theGulf.

The reported fuel efficiency for raildoes not vary as widely as that for bargetransportation. The average of figures re-ported since 1979 was 228 ton-miles pergallon. It should be noted, however, that unittrains could expect to have a much betterfuel efficiency than this, around 350 ton-miles per gallon (Congressional BudgetOffice, 1981; and SRI International, 1980).Grain shipments from major cities to portsfor export are more likely to move by unittrain, and therefore, the figure of 350 ton-miles per gallon may be more relevant thanthe overall average.

The fuel efficiency for Great Lakesvessels has been reported at 600 ton-miles

Ton-miles per gallon refer to the numberof miles one ton of cargo can be moved perone gallon of diesel fuel.

14This included 19 observations, some whichwere upstream or downstream, and somewhich were overall figures. Sources wereCongressional Budget Office (1982), Eastman(1980), and Beaulieu (1982).

34

per gallon by Schenker, et al. (1976). Thismeans that strictly in terms of fuel efficien-cy, Great Lakes vessels have a substantialadvantage over either rail or barge transpor-tation. However, circuity of each transpor-tation route must also be considered. GreatLakes vessels must follow a very indirectroute to get from either Duluth/Superior orChicago to the St. Lawrence River. Bargesalso are forced to follow indirect courses,especially on narrow, winding rivers. In orderto account for circuity, some studies haveadjusted their figures downward, dependingon the route which must be followed by eachtransportation mode. Eastman (1981) did thisfor both rail and barge movements of grainfor export from the upper Midwest to portson the Gulf of Mexico. He states, ". . . aftercircuity has been taken into account on bothsides, barge is considerably more fuel effi-cient than rail" (p. 13). Schenker, et al. have

Adone a similar analysis which shows that,despite less circuity by rail from Chicago toAtlantic ports, a Great Lakes vessel uses lessfuel to ship a ton of grain from Chicago tooverseas ports. While neither study comparesGreat Lakes vessels directly with barges, thecircuity factors in Eastman can be used torevise the.ton-miles per gallon, as shown inTable 20. This shows that Great Lakes ves-sels still have a considerable advantage overeither rail or barge transportation in terms ofenergy efficiency.

Destination of Grain Exports

One of the variables which was consideredonly briefly before is the destination of fu-ture exports. Figures 7, 8 and 9 show theorigins and destinations of corn, soybean, andwheat exports during 1977. As Figure 7

This figure was confirmed by DaveBuchanon of the Lake Carrier's Association,9/8/82.

The barge and rail routes are fromMinneapolis to the Gulf, while the Lakesroute is from Duluth/Superior to the lowerlakes. The results from Schenker, et al.,confirm that Great Lakes vessels are stillmore fuel efficient than rail when the railroute goes through the Atlantic ports.

indicates, Western Europe is a major demandsource for corn moving out of the GreatLakes. The future imports of Western Europewill have a direct impact on the future graintraffic of the Great Lakes.

At the present time, projections of grainimports from the U.S. are not available on acountry or regional basis. However, histori-cal data on grain imports from the U.S. areavailable. In examining U.S. grain ship-ments to Western Europe since 1974, no ap-parent trends were observed. Unless oneassumes significant decreases in populationor personal income in Western Europe, thereis no reason to expect decreased grain ship-ments from Lake ports to Western Europe.The greatest increase (over 100 percent) innet grain imports by 1990, regardless of orig-inating country, are expected to occur in theless developed market economies, especiallySouth America, Middle (Latin) America andIndian Ocean countries. Asia, Africa and theMideast can also expect substantial increases(over 50 percent) in net grain imports by1990. Small to moderate increases in netgrain imports can be expected in the SovietBloc, China, Japan and the Republic of SouthAfrica.18

Evidence of the impact of destination onthe port chosen for export was reported inthe Grain Transportation Situation(August 2, 1982). There, it was noted that 43percent of the 1981 export crop of hard redspring wheat from North Dakota was export-ed through the Pacific ports, even thoughGreat Lakes ports were closer to the produc-tion area. This was due to the fact thatJapan and the Philippines were major custo-mers for this wheat. In contrast, durumwheat, which was exported mainly to Europe,relied heavily on the Great Lakes ports, eventhough it was produced in roughly the samearea as the hard red spring wheat.

U.S. Department of Agriculture, ForeignAgriculture Service, Foreign AgriculturalCircular (various issues).18"A Forecast of U.S. and World Agricultureto the Year 1990," MSU Agriculture Model,Department of Agricultural Economics,Spring 1982.

Figure 7

Corn Movements to Pointsof Export

By All Modes: 1977

GRAIN FLOWTHOUSANDS OF 8USHHS

~r~ !. 1 00,000I— 1,000,000\ -oo.ooo(— 800.000I— 700.000I™ MM. 000V- 500,000|—400.000\~ 100,000f— 200,000\~ 100.000

REGIONSCanada

The Caribbean, (ind South Amen

Northern fum „•

Southern tofoptj

and MediK rr,.im;.

OF

,'nlr,

DESTINATION6

i y

8

tiistem A

SouiheasPersian CIndian O

Australia< >teani,i

p, one of a series displaying the existing1 waterways system m>d commoditynts, is published for the U. S. Army Engineer^sources Support Center, institute for Water

if the National Waterways Study,er Resources provided technicalnined the content of the mapsn Corn Movements in the United

The Institute for Wa

using data reportedStales: IntcrtegionaRequirements inStation, College of Agriculture, Unt Urbana-Champaign, <s

77, Agricullural fxperlnof Illi!

MODE OF TRANSPORTATION

RAIL WATER TRUCK

CORN MOVEMENTS TO POINTS OF EXPORT

BY ALL MODES: 1977 I t I -I? 000; 000

Figure 8

Soybean Movements to Pointsof Export

By All Modes: 1977

, n k ( h , i t ) I I I I ^ l ^ ^ ! • l ^ ! K ( «,• n o ! s b o

MODE OF TRANSPORTATION SOYBEAN MOVfiMENTS TO POINTS OF EXPORT

BY ALL MODES; 1977RAIL WAlfR TRU<

Figure 9

Wheat Movements to Pointsof Export

By All Modes: 1977

splaytng tne existing

ts, is published for the U. S. Army Engmrpi

Flow, !<;» than 100,000 bushels we not sh

MODE OF TRANSPORTATION WHEAT MOVEMENTS TO POINTS OF EXPORT

BY ALL MODES: 1977

Albets Equal Area ho/ec

SOU.£ 1:17,000.000

RAIL WATER TRUCK

The Lewis Dreyfus Corporation (SeawayReview, 1981) has asserted that the greatestincrease in future exports will go to Asiancountries which are best served by thePacific ports. For this reason, they predictthe Pacific ports will be over capacity by1990 and will have to divert some of theirshipments to other ports. Gallimore (1981)also foresees an increase in the imports ofgrain by the petroleum exporting countriesand China in the 1980s. In particular, hepredicts an increased quantity of wheat mov-ing through the West Coast ports. However,he does not foresee any capacity problems asa result of this. It is not clear whether thegrowth in exports out of the Pacific Coastports will be higher than that which waspredicted here. Most of the trends citedabove began in the 1970s (O'Brien, 1981) andshould be incorporated into the projectionsmade in this study. Port capacity problemson the West Coast are not anticipatedthrough 1990. It is true that the centrallyplanned economies such as China and Russiacan have the most disrupting effects on theexport situation of the U.S., due to theirabrupt and erratic entrances into the interna-tional market. Predicting their impact istherefore difficult. Large Russian grain pur-chases directly affect Seaway volumes just aslarge purchases by China affect Pacificports. Any major changes in trade policiesbetween the U.S. and these two countriesalter the relationships reported here.

Lock and Dam No. 26

Other factors which need to be consideredare constraints at particular points in otherportions of the U.S. transportation system.One of these is the bottleneck at Lock andDam 26 on the Mississippi River. Gaibler(1979) expects this facility to reach its maxi-mum capacity by 1982 (p. 7). Construction iscurrently underway to build a new facility atthis location, but the work won't be complet-ed until nearly 1990. In the meantime,shippers have found alternatives, such asmoving grain by rail to points south of St.Louis where it is then loaded onto barges,thereby bypassing Lock and Dam 26. TheLewis Dreyfus Corporation (Seaway Review,1981) estimates this rail movement at 100 to150 million bushels yearly. If laker rates

were competitive with these rail-barge com-bination rates, the Great Lakes ports may beable to pick up some of the overflow ship-ments that exceed the capacity of Lock andDam 26.

Panama Canal

Another constraint in the system at thepresent time is the capacity of the PanamaCanal. Gaibler (1979) reports that the Canalhas been operating at or above capacity lev-els recently. If the predicted increase inexports to Asia, Japan, and China are real-ized in the future, the Panama Canal willundergo added pressure from exports origi-nating at the Gulf ports. If remedies are notfound to alleviate the backlog of ships, moregrain than anticipated may be diverted to thePacific ports.

Other Seaway Constraints

There are three constraints on the GreatLakes-St. Lawrence Seaway system that needto be considered.

Size of Vessel: The first is the constrainton ship size. The current restrictions on theSeaway's locks are lengths of 730 feet, widthsof 76 feet, and drafts of 26 feet. These ruleout any ocean-going ships larger than 35,000DWT. Most ocean vessels over 25,000 DWTcannot navigate the Seaway due to the sizerestrictions (U.S. Maritime Administration,1982). The Maritime Administration (1980)has predicted that the average vessel size by1990, for dry bulk vessels, will be larger thanseaway size. However, H.P. Drewry, shippingconsultants in London, have contradicted thisopinion (Helberg, 1981). They have foundthat "the most commonly-used ocean graincarriers through the next decade will contin-ue to be ships in the 25,000 to 40,000 DWTrange" (Helberg, 1981, p. 19). Some ships ofthis size can load partially at Great Lakesports and then top-off at the deep waterports of the St. Lawrence River. Binkley andRevelt (1981) have similar findings asDrewry, and feel that the explanation lies inthe nature of grain trading. Internationalgrain movements often involve ports withpoorly developed facilities, and the volume oftrading tends to be relatively unstable. Both

39

of these characteristics are unsuited to lar-ger ships which "require well-developed portsand a fairly reliable volume of cargo (tooperate efficiently)" (Binkley and Revelt,p. 4). Nevertheless, the following tableshows that the trend in vessel size for graintrading is increasing and can be expected toincrease in the future. In particular, thedrastic decline in the number of 25,000 DWTvessels will have an impact on the Seawaytrade. The use of laker feeders to theSt. Lawrence elevators will have to increaseto make up for the decline in the use ofsal ties.

TABLE 21

Shares of World Grain Tradeby Vessel Size

Vessel (DWT Range)

25,000

25,000-40,000

40,000-60,000

60,000-100,000

100,000

1975

34

35*

15

9

_7

100

1980(Percent)

17

35

20

19

_9

100

1990

12

31

22

23

n100

^Estimated.

Source: Helberg, Davis. 1981. "AgriculturalExports and Economic Development," in Sea-way Review, Vol. 11, No. 1, Autumn 1981.

would be greatly enhanced. The other part ofthe capacity constraint is simply the numberof ships that can pass through the Welland ina given time period. Combining these twofactors, Gelston (1980) predicts that the limitof the Welland will be reached around 1986.This takes into account movements of allcargo through the Canal, not just grain. Ex-panding the capacity of the Welland wouldrequire a major construction effort and, un-less it is undertaken in the very near future,the capacity of the Welland may limit futuregrain exports from the Great Lakes ports.

Length of Navigation Season: The thirdconstraint on the Seaway is the length of thenavigation season. The Seaway currentlycloses around mid-December and reopenswhen weather permits, about April 1st, plusor minus one week. There have been numer-ous studies done on the benefits and costs ofextending the navigation season of the St.Lawrence Seaway (see references of St. Law-rence Seaway Authority, Seaway in Winter:A Benefit-Cost Study, 1978J! A particularbenefit would accrue to those in the grainshipping industry, since even a small length-ening of the season would help to relieve theharvest period congestion that builds up onthe other modes of transportation after theSeaway closes (Gelston, 1980). The magni-tude of the benefits of an extended naviga-tion season is widely disputed. The reportprepared for the St. Lawrence SeawayAuthority states that the benefits would beinsignificant. However, there are so manyvariables that could change under a scenarioof year-round navigation that it is difficult topredict the net effect.

It is apparent that eventually the Sea-way's locks will have to be expanded tofacilitate the larger ships if the Great Lakesports are to continue to expand their share ofthe export market.

Capacity of Welland Canal: The secondconstraint on the Seaway is the capacity ofthe Welland Canal. Part of this capacityconstraint is related to the restriction on shipsize noted above. If larger ships could passthrough the Canal, the throughput capability

Ability to Attract Vessels: The possibilityof the two-way trade of steel and grain wasmentioned previously as being important forocean-going ship availability at Great Lakesports. In the absence of this in-bound steelcargo, the Great Lakes ports will have to bidships away from the Gulf and Atlantic portswhere two-way cargoes are more readilyavailable. This, of course, raises rates andputs the Great Lakes ports at a competitivedisadvantage. The Great Lakes area needs todevelop an importing infrastructure that canattract in-bound cargoes to Great Lakesports.

The possibility for backhauls is an impor-tant consideration for the feedership opera-tions of lakers as well. The lakers mustbasically compete with the barge and railindustries for moving grain to export ports.The barge industry has had successful back-haul operations from the Gulf, in particularwith fertilizers. Increased U.S. fertilizer im-ports (from countries such as Canada,Mexico, and Russia) provide an additionalopportunity for the St. Lawrence ports toattract backhaul cargo for the lakers.

VH. SUMMARY

The use of the Great Lakes-St. LawrenceSeaway for transportation purposes providesan important contribution to the U.S. econo-my. Although many different commoditiesmove over the Seaway, the single largestvolume commodity moving through theWelland Canal is grain. In recent years, grainhas represented some 40 to 50 percent ofvolume of traffic on the Seaway. Not only isthe grain the single largest volume com-modity shipped on the Seaway, but its im-portance relative to other commodities con-tinues to increase. The historical trafficdata suggest that the future economic role ofgrain on the Seaway will become increasinglyimportant.

The general purpose of this report was toprovide an overview of the economic impor-tance of the shipment of grain on the GreatLakes-St. Lawrence Seaway. Accordingly,information was provided on the current andfuture role of the Seaway in the transporta-tion of grain. In so doing, a brief descriptionof the nature of grain flows on the GreatLakes-St. Lawrence Seaway was given. Next,projections of grain exports to 1990 weremade and evaluated relative to port capaci-ties. Next, an indication of the relativecompetitiveness of the Great Lakes ports inthe shipment of grain was obtained throughan examination of shipping rates. Finally,some brief information was presented onother selected factors affecting the competi-tiveness of grain shipments on the GreatLakes-St. Lawrence Seaway.

In 1980, 15.1 million metric tons of grainwere shipped from U.S. Great Lake ports.This compares to a total of 14.8 millionmetric tons shipped from Canadian Lakeports. In general, both Canada and the U.S.contribute roughly equal traffic on the GreatLakes-St. Lawrence Seaway.

Corn is the largest volume U.S. com-modity shipped on the Lakes and when com-bined with wheat they represent some two-thirds of the total volume. Duluth-Superioris the largest volume U.S. port with over one-half of the total U.S. lake shipments. Theports of Milwaukee, Chicago, Toledo, Huron,and Saginaw account for the bulk of theremaining grain shipments.

For Canadian ports, over three-quartersof the grain shipped is wheat. In 1980,Thunder Bay accounted for nearly 94 percentof the total grain shipped from CanadianLake ports. The Ontario ports of Windsor,Wallaceburg, Sarnia, and Goderich accountedfor the bulk of the remaining shipments.

During the period 1974-81, the averageshares of total U.S. grain exports by majorport area were: 11.4 percent Lakes; 12.5percent Atlantic; 62.6 percent Gulf; and 13.5percent Pacific. Since 1974, sunflower seedshipments on the Lakes increased from 13.0million bushels to 98.3 million bushels in1980. This rapid growth in the export ofsunflower seeds from Lake ports has con-tributed substantially to the total volume ofagricultural exports from Lake ports.

Total U.S. grain exports are projected toincrease 45 percent by 1990 over the 1979-81average levels. Disaggregation of the pro-jected level of total U.S. exports by majorport area results in the following percentageincreases: Lakes, 58 percent; Atlantic, 34.4percent; Gulf, 40.2 percent; and Pacific, 61.0percent. The greatest percentage increase ingrain exports can be expected at the Pacificports followed by Lake ports. All ports willexperience substantial growths in grain vol-umes, but a relatively larger share of totalU.S. grain exports can be expected to movethrough the Pacific and Lake ports. Pro-jected sunflower seed exports contributedsubstantially to the expected increase in ag-ricultural exports through the Lake ports.

41

Next, the projected levels of grain ex-ports for each port were evaluated relativeto their respective port capacity. The resultsshowed that port capacity will likely not be abinding constraint at any of the portsthroughout the 1980s. It does appear, how-ever, that the Gulf port is approaching capa-city levels and therefore is likely to be moresensitive to potential stresses in the system.Nevertheless, the port facilities themselvesappear to be adequate. Expected obstacles inthe future movement of grain exports arelikely to come from other sources, such aslarge unexpected export grain-purchases in aparticular region of the world, rapidly in-creasing real energy prices, or bottlenecksoccurring in other parts of the transportationsystem.

In order to obtain a better view of therelative competitiveness of the Great Lakeports, vis-a-vis, other transportation routes,a cursory examination of relative shippingrates was made. Various traffic routes fromDuluth/Superior, Chicago, and Toledo to Rot-terdam were evaluated. Given the 1982 ratestructure, grain exports from Great Lakesport areas to Rotterdam can most econom-ically be shipped by barge to the Gulf, thenby ocean vessel to Rotterdam. Great Lakeroutes, however, provide an attractive,"second best" alternative.

These results, however, are very sensitiveto grain supplies in the U.S. and the level ofexport demand for various grains. In 1982,extremely low barge rates were in existenceas a result of over-capacity on the MississippiRiver system. As barge rates rise, the GreatLakes route will become increasingly attrac-tive for the export of grain, especially fromthe Duluth/Superior port. Rail rates willhave an important influence on the relativeattractiveness of the Lakers for the Chicagoand Toledo ports. It should be stressed,however, that the competitive relationshipsamong the traffic routes at the various portsare highly sensitive to changing economicconditions. The relationships presented hereare valid only during the period in which therate data were analyzed.

Large increases in real energy prices canhave important implications for modal selec-tion. An examination of energy efficienciesacross transportation modes shows substan-

tial advantages to Great Lakes vessels, vis-a-vis, rail or barge. Rapidly escalating fuelprices would tend to favor Great Lake portsfor the export of grain, holding all otherfactors constant.

The likely changes in the final destinationof U.S. grain exports was also considered.The greatest percentage increases are ex-pected in the less developed market econo-mies, especially South America, LatinAmerica, and Indian Ocean countries. Asia,Africa, and the Mideast can also expect toincrease substantially, but to a somewhatlesser extent. Small to moderate increases innet grain imports can be expected in theSoviet Bloc countries, China, Japan, and theRepublic of South Africa. Western Europedemand is expected to experience moderategrowth. Hence, there appears to be nocompelling reason to believe that grain ex-ports from the Lake ports will be adverselyaffected by locational mix of importing coun-tries.

Other sources of possible constraints onthe export of grain include potential bottle-necks at Lock and Dam No. 26 on theMississippi River and the Panama Canal. Onthe Seaway, vessel size limitations, WellandCanal capacity and length of navigation sea-son are potential limitations, especially inthe long-run.

In general, the Great Lakes-St. LawrenceSeaway is an attractive means, relative toother ports, of moving U.S. grain to exportmarkets. With adequate long-range planningthe Seaway will continue to serve as animportant contributor to the well-being ofboth the national and Lake State economies.

BIBLIOGRAPHY

Beaulieu, Jeff. Personal Correspondence,Department of Economics, Iowa StateUniversity.

Binkley, James K. and Mary E. Revelt. TheRole of Transportation in InternationalAgricultural Trade, Purdue University Ag-ricultural Experiment Station BulletinNo. 337, July 1981.

Congressional Budget Office. Weekly Letter,WL Feb. 5, 1982, p. 3 and Appendix.

Dezik, Jack and Stephen Fuller. U.S. GrainPorts: Location and Capacity, Texas Ag-ricultural Experiment Station, PR-3593,October 1979.

Eastman, Samuel Ewer. Fuel Efficiency inFreight Transportation. Presented at An-nual Meeting of the Transportation Re-search Board, Washington, D.C., January1980.

Fuller, Stephen W. The Export Grain Trans-portation System: Factors Affecting ItsFuture and Efficiency, Staff Paper DIR81-1, SP-6, Texas Agricultural Experi-ment Station, 1981.

Fuller, Stephen W. and Mechel S. Paggi. Portof Houston: Intermodal Grain TransferSystem and Market Area, 1976-1977,Texas Agricultural Experiment Station,B-1190, October 1978.

Fuller, Stephen; Mechel Paggi; PruchyaPiumsomboon; and Donald Phillips. Inter-modal Transfer Efficiency at Grain Ports:An Analysis of Traffic Congestion, TexasAgricultural Experiment Station.

Gaibler, Floyd D. The Transportation Sys-tem's Capacity to Meet Grain Export De-mand, 1979/80 Outlook, National Econom-ics Division, ESCS, USDA, October 1979.

Gaibler, Floyd D. An Assessment of U.S.Transportation and Port Capacity to MeetAgricultural Export Demand, Update of1979 Report.

Gallimore, William W. "Transporting Foodand Agricultural Products" in Agricultur-al-Food Policy Review: Perspectives forthe 1980s, USDA, Economics and Statis-tics Service, AFPR-4, April 1981.

Gelston, William. "The St. Lawrence Seawayand Rural Freight Transportation" inRural Freight Transportation: New PolicyInitiatives, Luther Pickrel and JerryFruin, eds., University of Minnesota Agri-cultural Extension Service, Special Report86-1980, 1980.

Grain Transportation Situation, Office ofTransportation, USDA, various issues.

Helberg, Davis. "Agricultural Exports andEconomic Development" in SeawayReview, Vol. 11, No. 1, Autumn 1981.

O'Brien, Patrick M. "Global Prospects forAgriculture" in Agricultural-Food PolicyReview: Perspectives for the 1980s,USDA, Economics and Statistics Service,AFPR-4, April 1981.

The St. Lawrence Seaway Authority. TheSeaway in Winter: A Benefit-Cost Study,LBA Consulting Partners, Ltd., October1978.

The St. Lawrence Seaway Authority. TheSeaway-Operations-Outlook-Statistics,Ottawa, Canada, 1982.

St. Lawrence Seaway Development Corpora-tion. The St. Lawrence Seaway TrafficReport for the 1981 Navigation Season,U.S. Dept. of Transportation, 1982.

St. Lawrence Seaway Development Corpora-tion. 1981 Annual Report, U.S. Dept. ofTransportation, 1982.

Schenker, Eric; Harold M. Mayer; andHarry C. Brockel. The Great LakesTransportation System, University of Wis-consin Sea Grant College Program, Tech-nical Report No. 230, January 1976.

Seaway Review, "The Expanding Role of theGreat Lakes in the Projected Movementof U.S. Grain," Vol. 10, No. 3, Spring1981.

Seaway Review, "The State of the Lakes,"Vol. 11, No. 2, Winter 1982.

SRI International. Track and Rail EnergyComparisons—Project 1275. Prepared forthe Western Highway Institute, October1980.

Sussman, Gennifer. The St. Lawrence Sea-way, The Canada-U.S. Prospects Series,CD. Howe Research Institute, NationalPlanning Association, 1978.

Taylor, Merritt; Stephen Fuller; and YaniraBanos. Trends in U.S. Grain and SoybeanExports and Utilized Port Areas, 1969-78,Texas Agricultural Experiment Station,Miscellaneous Publication No. 1477, June1981.

U.S. Department of Agriculture, Foreign Ag-riculture Service. Foreign AgricultureCircular, FG-7-77, July 1977 and FG-13-82, April 26, 1982.

U.S. Maritime Administration. U.S. BulkVessel Marketing Guide, Great Lakes-St.Lawrence Seaway, Iron Ore-Grain Trade,U.S. Dept. of Commerce, PB-294333,December 1978.

U.S. Maritime Administration. National PortAssessment, 1980-1990, U.S. Dept. ofCommerce, Office of Commercial Devel-opment, Office of Port and Inter modalDevelopment, June 1980.

U.S. Maritime Administration. Great LakesOverseas Cargo Assessment, U.S. Dept. ofCommerce, Great Lakes Region, Cleve-land, Ohio, July 25, 1980.

U.S. Maritime Administration. Personal Cor-respondence, 1982.

Appendix A

Lake Shipments of Grain From U.S- Ports

Table

A.I Lake Shipments of Grain From Duluth-Superior, 1980Direct Overseas Grain Destinations, Duluth-Superior, 1980

A.2 Lake Shipments of Grain From Milwaukee, Wisconsin, 1980Direct Overseas Grain Destinations, Milwaukee, Wisconsin, 1980

A.3 Lake Shipments of Grain From Chicago, Illinois, 1980

Direct Overseas Grain Destinations, Chicago, Illinois, 1980

AA Lake Shipments of Grain From Saginaw, Michigan, 1980

A.5 Lake Shipments of Grain From Toledo, Ohio, 1980Direct Overseas Grain Destinations, Toledo, Ohio, 1980

A.6 Lake Shipments of Grain From Huron, Ohio, 1980Direct Overseas Grain Destinations, Huron, Ohio, 1980

A.I

Lake Shipments of Grain From Duluth-Superior, 1980

(000 Bushels)

U.S. Ports

St.Lawrence

Great LakesCanada

Overseas

Total GreatLakes

OverseasSunflowers

Total:

M.T.

Cargoes

111

123

3

195

432

66

498

Total

53,335

106,504

1,959

102,997

264,799

97,949

362,744

8,083,213

Wheat

47,413

60,942

__

61,973

169,878

169,878

4,623,369

Corn

__

23,504

909

17,530

41,944

41,944

1,065,438

Oats

177

549

1,050

2,361

4,137

4,137

60,049

Barley

5,385

18,621

__

17,925

41,933

41,933

912,993

Rye

360

3,338

—_

2,075

5,774

5,774

146,642

Flaxseed

—

__

__

87

87

87

2,210

Soy

—

1,047

1,047

1,047

28,495

Sunflower

—

__

—

1,244,017

1,244,017

1,244,017

Direct Overseas Grain Destinations, Duluth-Superior, 1980

(000 Bushels)

Destination

Holland

Italy

Spain

Venezuela

France

Belgium

Tunisia

Algeria

East Germany

Iraq

Nigeria

Norway

USSR

United Kingdom

Poland

West Germany

Finland

China

Ecuador

Mexico

Portugal

South Africa

Other

Total

Cargoes

35

34

18

16

11

10

7

6

6

6

6

5

5

5

4

4

3

1

1

0

0

0

N/A

195

Wheat

11,925

11,092

4,055

8,032

5,839

4,220

2,821

2,311

__

430

2,259

1,249

—

2,273

~

621

1,777

566—

—

- -

—

2,503

61,973

Corn

2,44 A

267

2,404

~

695

1,413

~

551

—

—

—

—

3,237

502

2,364

157

—

- -

—

—__

3,496

17,530

Grain

0at9

1.C75

172

~

__

«

—

537

1,462

2,993.._

—

—

—

- -

—

—

339«

—

775

2,361

Barley

—

6,580

5,546

—

- -

- -

—

—

—

—

—

~

—

—

—

«

—.. .

—

—__

807

17,925

Rye

502

—

—

—

__

—

—

1,573

—

—

—

—

—

—

2,075

TotalFlaxseed Soybeans Grain

15,946

1,046 19,157

12,005

8,032

6,534

— — 5,633

2,821

3,399

1,462

— — 3,423

— 2,259

2,822

3,237

2,775

2,364

87 — 8fi5

1,777

— — 566

339__

_

__

7,581

87 1,046 102,997

Sunflower

Cargoes

26

5

—

3

1

- -

«

_

—

—

—

10

—

6

13

2

- -

66

Seed*/

MetricTons

570,451

127,618

—

- -

~

36,836

46,128

—

—

—

-

__

~

150,110

—

—

—

83,077

201,461

28,336

—

1,244,017

*The number of cargoes of sunflower seeds represent those shipments of entirely sunflowers. Mixed shipments of bothgrain and sunflower seeds were counted as grain shipments.

A.2

Lake Shipments of Grain From Milwaukee, Wisconsin, 1980

(000 Bushels)

Destination Cargoes Total Corn

Great Lakes

Canada 7 3,262,077 3,262,077

St. Lawrence 47 38,792,760 38,792,760

Overseas JL2 7,035,691 7,035,691

Total: 66 49,090,531 49,090,531

Direct Overseas Grain Destinations,Milwaukee, Wisconsin, 1980

Destination Cargoes Total Corn

Poland 5 2,895,931 2,895,931

West Germany 2 1,358,130 1,358,130

USSR 3 1,823,695 1,823,695

Spain _2 957,935 957,935

Total: 12 7,035,691 7,035,691

A.3

Lake Shipments of Grain From Chicago, Illinois, 1980

(000 Bushels)

Destination Cargoes Total Corn Soybeans

St. Lawrence

Overseas

Total:

24 21,016

11 9,833

41 30,849

20,339 677

6,046 3,787

26,385 4,464

Direct Overseas Grain Destinations, Chicago, Illinois, 1980

(000 Bushels)

Destination

United Kingdom

Spain

Japan

Denmark

Poland

Belgium

West Germany

Greece

USSR

Total:

Cargoes

2

1

2

3

4

1

2

1

1

17

Total

1,191

544

1,189

1,504

2,397

623

1,214

550

621

9,833

Corn

1,191

—

—

—

2,397

623

1,214

—

621

6,046

Soybeans

—

544

1,189

1,504

—

—

—

550

3,787

A.4

Lake Shipments of Grain From Saginaw, Michigan, 1980

(000 Bushels)

Destination Cargoes Total Wheat Corn Soybeans

Great Lakes

Canada 7 1,769 — 1,400 369

St. Lawrence 17 7,394 1,984 3,267 2,143

Overseas ^Z. — — — —

Total: 24 9,163 1,984 4,667 2,512

A.5

Lake Shipments of Grain From Toledo, Ohio, 1980

(000 Bushels)

Destination Cargoes Total Corn Soybeans Wheat

Great LakesCanada

St. Lawrence

Overseas

Domestic -U.S.

Total:

55

144

62

2

18,

111,

35,

503

967

154

931

7

80

18

,377

,177

,004

—

10,

22,

15,

219

269

973

—

9,

1,

907

521

177

931

263 166,555 105,558 48,461 12,536

Direct Overseas Grain Destinations, Toledo, Ohio, 1980

(000 Bushels)

Destination

Spain

United Kingdom

Japan

Italy

Norway

France

West Germany

Netherlands

USSR

Greece

Morocco

Canary Islands

Total:

Cargoes

20

15

12

4

3

2

2

1

1

1

1

0

62

Total

11,931

7,851

6,367

2,522

1,836

1,290

1,272

176

637

383

574

315

35,154

Corn

7,021

7,469

—

1,919

—

—

652

—

637

—

—

315

18,004

Soybeans

4,919

382

6,367

—

1,836

1,290

620

176

—

383

—

—

15,973

Wheat

—

—

—

603

—

—

—

—

—

—

574

—

1,177

A.6

Lake Shipments of Grain From Huron, Ohio, 1980

(000 Bushels)

Destination

Great LakesCanada

St. Lawrence

Overseas

Domestic - U.S.

Total:

Cargoes

35

3

5

1

44

Total

10,152

1,802

3,072

542

15,568

Wheat

—

608

—

542

1,150

Corn

6,847

1,194

2,454

10,495

Soybeans

3,305

—

618

3,923

Direct Overseas Grain Destinations, Huron, Ohio, 1980

(000 Bushels)

Destination Cargoes Total Corn Soybeans

United Kingdom 2 1,207,072 1,207,072

Italy 1 654,024 654,024

West Germany 1 617,986 — 617,986

Scotland 1 593,373 593,373 —

Total: 5 3,072,455 2,454,469 617,986

Appendix B

Lake Shipments of Grain From Canadian Ports

Table

B.I Lake Shipments of Canadian Grain From Thunder Bay, 1980

Direct Overseas Grain Destinations, Thunder Bay, 1980

B.2 Lake Shipments of Grain From Goderich, Ontario, Canada, 1980

B.3 Lake Shipments of Grain From Sarnia, Ontario, Canada, 1980

B.4 Lake Shipments of Grain From Waliaceburg, Ontario, Canada, 1980

B.5 Lake Shipments of Grain From Windsor, Ontario, Canada, 1980Direct Overseas Grain Destinations, Windsor, Ontario, Canada, 1980

B.I

Lake Shipments of Canadian Grain From Thunder Bay, 1980

(Metric Tons)

Destination Cargoes Total Wheata Oats Barley Rye Flaxseed Rapeseed

Great LakesCanada

St. Lawrence

Overseas

Total ofAll Ports:

21

1,685,095

10,952,984

1,202,127

1,315,048 69,465 298,823

9,546,823 120,367 1,145,135

380,118 109,223 84,245

1,759 0 0

38,987 55,619 46,053

315,159 187,322 126,000

13,840,206 11,241,989 299,055 1,528,203 355,905 242,941 172,113

Includes Durum.

Direct Overseas Grain Destinations, Thunder Bay, 1980

(Metric Tons)

DestinationForeign Port

Holland

DestinationUnknown

USSR

Brazil

West Germany

Poland

United Kingdom

NorthernIreland

Colombia

Italy

Morocco

Peru

Algeria

Total:

Cargoes(Est.)

28

23

21

17

11

6

4

3

3

2

1

1

1

121

Wheat3

1,575

57,998

4,423

259,729

~

19,978

—

13,523

—

10,078

—

—

12,814

380,118

Oats

23,253

7,040

—

—

72,262

—

__

—

6,668

—

—

—

109,223

Barley

22,253

—

«

—

—

9,786

__

47,206

—

—

5,000

—

84,245

Rye

7,140

17,513

289,716

—

790

—

__

--

—

—

—

—

315,159

Flaxseed

67,741

37,220

—

—

80,361

—

2,000

—

—

__

—

—

187,322

Rapeseed

74,992

25,804

—

—

5,897

—

8,367

—«

11,000

—

__

126,060

Sunflower

52,224

3,384

—

—

—

1,093

——

—

—__

56,721

Total

226,945

171,212

294,139

259,729

87,048

92,240

21,246

13,523

47,206

16,746

11,000

5,000

12.814

1,258,848

aIncludes Durum.

53

B.2

Lake Shipments of Grain From Goderich, Ontario, Canada, 1980

(000 Bushels)

Destination

Overseas

St. Lawrence -Canada

St. Lawrence -U.S.

Newfoundland,N.S.

Georgian Bay, Ont.

Total:

Cargoes

13

9

1

2

5

30

Total

Bushels

4,229

3,761

346

101

1,477

9,914

MetricTons

107,422

95,534

8,789

2,566

40,197

254,508

Wheat

Bushels

—

—

—

—

1,477

1,477

MetricTons

—

—

—

--

40,197

40,197

Bushels

4,229

3,761

346

101

8,437

Corn

MetricTons

107,422

95,534

8,789

2,566

214,311

B.3

Lake Shipments of Grain From Sarnia, Ontario, Canada, 1980

(000 Bushels)

Destination

Great LakesCanada

Overseas

Total:

Cargoes

26

16

42

Total

Bushels

10,327

5,057

15,384

MetricTons

277,706

128,455

406,161

Wheat

Bushels

7,137

7,137

MetricTons

194,237

194,237

Corn

Bushels

1,861

5,057

6,918

MetricTons

47,272

128,455

175,727

Soybeans

Bushels

1,330

1,330

MetricTons

36,197

36,197

B.4

Lake Shipments of Grain From Wallaceburg, Ontario, Canada, 1980

(000 Bushels)

Destination

St. Lawrence -Canada

Total:

Cargoes

9

9

Total

Bushels

1,301

1,301

MetricTons

33,748

33,748

Wheat

MetricBushels Tons

392 10,658

392 10,658

Bushels

909

909

Corn

MetricTons

23,090

23,090

B.5

Lake Shipments of Grain From Windsor, Ontario, Canada, 1980

(000 Bushels)

Destination

Great LakesCanada

Overseas

Total:

Cargoes

8

20

28

Total

Bushels

3,624

4,628

7,892

MetricTons

97,305

107,329

204,634

Wheat

Bushels

2,894

—

2,894

MetricTons

78,762

—

78,762

Corn

Bushels

730

3,794

4,524

MetricTons

18,543

96,373

114,916

Soybeans

Bushels

—

127

127

MetricTons

—

3,456

3,456

Soybean

Bushels

—

347a

347a

Meal

MetricTons

—

7,500

7,500

Soybean equivalent where one bushel of soybeans equals 47.5 lbs. of soybean meal.

Direct Overseas Grain Destinations, Windsor, Ontario, Canada, 1980

(000 Bushels)

Destination

DestinationUnknown

Cuba

USSR

Japan

Total:

Cargoes

7

9

3

1

20

Total

Bushelsb

2,791

689

606

138

4,224

MetricTons

70,900

17,500

15,400

3,500

107,300

Because the type of grain shipped to each country was unknown,

the conversion of metric tons to bushels assumed all grain was

corn.

Publication of this document was sponsored by the Michigan Sea Grant Marine Advisory Service underGrant # N A-80-AA-D-0072, NOAA Office of Sea Grant, U.S. Dept. of Commerce.

MICHIGAN STATE UNIVERSITY

COOPERATIVEEXTENSIONSERVICE

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