Port of Hamilton wants more ‘short sea shipping’ to boost business and reduce carbon footprint

Short sea shipping is an idea whose “time has come,” said Hamilton-Oshawa Port Authority CEO Ian Hamilton, who cited a research paper released earlier this year that envisions a future with reduced highway and border congestion, lower greenhouse gas emissions and improved supply chain resilience.

The foundational study on Cross-Border Short Sea Shipping Opportunities by Fluid Intelligence, a data-analysis partnership of HOPA Ports and the McMaster Institute for Transportation & Logistics, shed light on the potential advantages of short sea shipping services between southern Ontario and the U.S. Great Lakes region.

Marine shipping is the most efficient way to move large quantities of cargo, noted Hamilton, who pointed out one vessel is capable of moving the same volume as nearly a thousand transport trucks while emitting just 15 per cent of the CO2 per metric tonne/km, making it the better environmental option.

The challenge, he said, is primarily regulatory barriers.

“We are currently not using the marine mode on the Great Lakes to its full potential, he said. “The Great Lakes-St. Lawrence River Waterway has the capacity to double the number of ships transiting the system every year, while investing in new measures to reduce greenhouse gas emissions, including developing a ‘Green Shipping Corridor’ with partners throughout the supply chain working to improve sustainability.”

While ships can certainly transport greater volumes, the study also focussed on prospective marine opportunities that were higher value and “somewhat smaller quantities than has traditionally been the case – cargoes that traditionally have moved by road.”

More containerized movement by sea and new short sea services that are “nimble and more frequent,” with smaller than traditional tonnages, may be the future for the Great Lakes marine shipping industry.

Opportunity was assessed in the research mostly on how marine could be complementary to trucking as opposed to being a competitor. New marine services could reduce dependence on cross-border trucking movements, keep scarce drivers closer to home and help reduce emissions and traffic congestion.

With more than 12,000 trucks per week making cross-border trips between southern Ontario and American Great Lakes ports – 5,000 from Toledo on Lake Erie alone – the potential is there for a marine service to transport more non-perishable commodities to handle the long-haul ‘middle mile.’

The Fluid Intelligence study identified numerous trade flows that could benefit from integrating marine transportation alongside trucking services. The study highlights potential commodities like scrap steel, plastics, paper, salt, manufactured goods – even assembled vehicles.

“This is what is meant by complimentary,” Hamilton noted. “You may still need to call a trucking company to pick up your goods from your factory or warehouse, and then on the other end, provide that last-mile to your customer’s door, but new marine services could take up that cross-border middle journey, reducing driver-shortage pressures, highway congestion, and greenhouse gasses.”

Short sea shipping, a widely adopted approach in Europe and Asia, is an increasingly appealing alternative to road transportation in the Great Lakes region. Factors such as population growth, highway congestion, driver shortages, rising fuel costs and the environmental advantage have contributed to a growing interest in marine transportation.

As Canada’s busiest economic region, southern Ontario’s critical infrastructure struggles to keep up with the demand on its highways. The economic cost of congestion in the Golden Horseshoe alone is estimated to be as much as $6 billion per year.

The Great Lakes region accounts for more than half of all U.S./Canadian bilateral border trade. If it were a single country, it would have a GDP of US $6 trillion, making it the third biggest economy in the world.

Approximately 28.5 million tonnes of cargo per year originating in Ontario are transported by truck to the US, with 70 per cent destined for a Great Lakes state. Some 24 million tonnes come the other way.

By diverting just 10 per cent of the existing cargo currently moved by truck between southern Ontario and the Port of Chicago, for example, the transportation system could save 220 tonnes of greenhouse gas emissions per week.

Electrification has a future role to play in alleviating the problem, the study declared, but will be “challenging” to implement for heavy trucks.

The study focuses on specific routes and commodity flows that are good candidates for new marine services. These include the potential for marine services between southern Ontario and ports on Lake Michigan and Lake Erie. Chicago and Milwaukee, with their concentration of economic activity and strong connections to the GTA and Hamilton, stand out as promising origin/destinations.

“This study gives us the real data we need to identify the most promising commodities and routes, where marine transportation can help address our mounting goods movement challenges. It is urgent that we find ways to reduce the greenhouse gas impact of the transportation sector,” Hamilton noted.

With population growth and highway congestion, driver shortages and fuel costs all part of the “perfect storm” hitting North American supply chains, “short sea shipping helps tackle all these problems.”

The Port of Hamilton handled nearly 3.8 million metric tonnes of goods in the first half of 2023, including almost a million tonnes of grain and 270,000 metric tonnes of finished steel.

Nearly ten million metric tonnes of cargo came through the harbour in 2022, including more than 2.5 million metric tonnes of wheat, corn and soybeans.

This study marks a significant step forward in unlocking the potential of short sea shipping on the Great Lakes, said Dr. Mark Ferguson a Senior Research Associate at McMaster Institute for Transportation & Logistics. With its promising benefits for reducing congestion, greenhouse gas emissions, and enhancing supply chain resilience, the findings underscore the importance of embracing innovative transportation solutions to meet the region’s evolving needs.

“A competitive and resilient goods movement sector is vital to the industries and supply chains that underpin Ontario’s economy and connect Ontario to export markets – and it’s changing,” Ferguson explained. “This study, which draws on information from different jurisdictions and levels of government, and insights from the marine sector, provides insights into market opportunities for marine and its implications for public policy in this evolving ecosystem.”