Cargo backlogs elsewhere could boost Toledo port’s freight

Joe Cappel

Posted on October 13, 2021

Oct. 10—The question is becoming familiar to Joe Cappel, vice president of business development for the Toledo-Lucas County Port Authority: how is a worldwide backlog of containerized cargo affecting Toledo’s port?

His typical immediate answer is “not really” because Toledo’s docks rarely handle containerized cargo. But Mr. Cappel said the problems at mega-ports like Los Angeles/Long Beach, Calif., Houston, and Savannah, Ga. could eventually bring some of that freight to Toledo.

Congestion in existing cargo lanes could inspire some shipping companies to reroute their traffic, especially if those delays are expected to persist, he said.

“The Great Lakes can serve as a relief valve in some capacity, but it all takes time,” Mr. Cappel said.

“Companies are using technology to streamline their processes,” he said, and that could lead some to pursue new routings “instead of just trying to jam it through the same congested corridor the way it’s always been done.”

While several proposals to reload containers from ocean-going megaships onto St. Lawrence Seaway-sized vessels at ports like Halifax or Melford, N.S. have yet to gain traction, the Port of Cleveland has landed a direct, scheduled container service to and from Antwerp, Belgium that provides a monthly call with 13-day overseas transit time.

To develop that trade in Toledo, Mr. Cappel said, “there are some things we would have to overcome,” including setting up a Customs operation suitable for containers and the “opportunity cost” of setting up such a terminal.

But Toledo’s abundant acreage, its new and versatile mobile harbor cranes, and robust rail and highway access work in its favor, he said.

For now, Toledo’s port primarily handles bulk materials like coal, grain, and iron ore, “breakbulk” cargoes dominated by metals, and occasional shipments of machinery, wind-turbine parts, and lumber. And in some of those sectors, it’s having a banner year.

At the head of the list is iron ore, which soared by more than 56 percent during the first half of the 2021 shipping season thanks mainly to Cleveland-Cliffs’ new direct reduction plant in East Toledo ramping up production of iron briquettes for use by steel mills.

The new plant “has been a big shot in the arm with their ore tonnage,” Mr. Cappel said, “and this year it seems like everyone is going fairly well.”

Through August, 2,963,534 tons of iron ore had crossed Toledo’s docks, which also handle ore hauled by train to what is now a Cliffs-owned steel mill in Middletown, Ohio. That was up from 1,898,651 tons last year.

The cargo crunch “hasn’t impacted us as much as some of the coastal ports because of the nature of our business,” Mr. Cappel said.

Toledo’s coal sector also was up through August, to 1,378,200 tons this year from 1,067,803 a year ago — a 29 percent increase — while dry-bulk cargoes like construction aggregates and limestone were up 10 percent.

Grain, general cargo, and petroleum and liquid bulk, meanwhile, were down through that point in the Great Lakes shipping season, which for most cargoes starts in late March.

But Mr. Cappel said it’s too soon to judge the grain sector, which typically surges late in the year.

“From everything I hear, it’s going to be a good harvest,” he said, noting also that lingering effects from Hurricane Ida could divert some grain through Toledo’s port instead of down the Mississippi River system.

Toledo’s grain numbers are also getting a boost from The Andersons’ waterborne shipments of distillers’ dried grains, a byproduct of ethanol refining.

Overall, Toledo’s port tonnage was up 25.44 percent for the season through August, from 4.91 million tons in 2020 to 6.16 million tons this year.

Containers loaded mainly with imported consumer goods like clothing, electronics, and toys, meanwhile, typically come into metro Toledo by train or truck, with railroad terminals in Chicago often being a transfer point for containers shipped into the Midwest from Pacific ports.

Union Pacific and BNSF, the two main railroads linking the Pacific Coast with Chicago, have both faced periodic congestion at their Chicago terminals during the past year that they blamed on shipments being allowed to accumulate rather than being picked up quickly by receiving customers. Union Pacific notably stopped accepting Chicago-bound containers from southern California for several weeks during the summer.

But spokesmen for both Norfolk Southern and CSX Transportation, the two largest railroads in the eastern United States, said their container terminals in northwest Ohio — NS in Toledo, CSX in North Baltimore — were both currently congestion-free.

“Our operation in Toledo is a domestic facility only, so the challenges the national supply chain is experiencing at U.S. ports would not be true for Toledo,” said Connor Spielmaker, a Norfolk Southern spokesman. “Our business in Toledo remains healthy and we’re looking forward to continuing the growth of our intermodal business in this important market.”

CSX’s North Baltimore facility, meanwhile, receives and originates daily trains connecting directly from and to Union Pacific and BNSF that bypass Chicago terminals.

“The CSX Northwest Ohio terminal has remained fluid and is not experiencing operational issues,” CSX spokesman Cindy Schild said.

That a particular shipment is loaded domestically for rail transport does not mean it did not previously incur delay while moving overseas. Many shipments arriving in Los Angeles and other coastal ports are taken in their oceangoing containers to warehouses, sorted, and then repacked into larger domestic containers for movement inland.

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