Ohio port plans for start of all-water container service to Europe this spring.
The Port of Cleveland is about to embark on a bold move – offering a scheduled all-water container service from one of its terminals in the Great Lakes to the Port of Antwerp in Europe this spring.
The port, which has cargo terminals spread across 12 docks to the east and west of the Cuyahoga River along the Lake Erie shoreline, is known for its nearly 175-year history of handling bulk iron ore, not containers.
“This is a fairly bold move on our part,” said William Friedman, president and chief executive officer of the Cleveland-Cuyahoga County Port Authority, in a recent interview. “However, we felt like we needed to try something innovative or we would be stuck in status quo.”
In 2012, the port authority hired Martin Associates, a Lancaster, Pa.-based industry consulting firm, to undertake a study to see if the port stood a chance at dipping its toe in the container market. Surprisingly, a number of Ohio shippers interviewed for the study welcomed a local alternative to serving Europe via traditional East Coast ports, such as Montreal, New York/New Jersey, Baltimore and Norfolk, Va.
“The primary attraction was to have an alternate option to keep all lanes competitive,” said Steve Wharton, operations manager at The Lubrizol Corp., based in Wickliffe, Ohio. The company has voiced support for the Cleveland-Europe Express container service.
Lubrizol, which ships globally from its plants in the Midwest, moves about 600 TEUs of drummed lubricants annually to Northwest Europe. According to Wharton’s initial assessment of the proposed service, “transit time should be comparable and costs should be competitive with other delivery options.”
The port-to-port transit time between Cleveland and Antwerp is estimated to be 12 to 14 days, which is equal to the door-to-door transits for containers moving from Ohio via truck or rail to a U.S. Northeast port and then to Northern Europe by vessel.
The biggest challenge to the proposed Cleveland-Europe Express was attracting a carrier willing to undertake the all-water service. “The reality is that a lot of carriers look at the St. Lawrence Seaway (the waterway connecting the Atlantic to the Great Lakes) literally and figuratively as a big barrier to the market,” Friedman said.
Container services to the Great Lakes were attempted during the start of containerization in the 1960s, but none of them stuck and thus the liner carriers have bypassed all-water service to the region, opting to move boxes to Ohio by truck and rail from East and West coast ports.
However, the Dutch carrier Spliethoff Group expressed interest in the proposed service between Cleveland and Northern Europe. The carrier, which is no stranger to the Great Lakes, operates a fleet of more than 100 multipurpose, heavy-lift and roll-on/roll-off vessels ranging in size from 2,100 to 23,000 tons.
The port and carrier reached an agreement in November 2013 to offer a once-a-month scheduled vessel call at Cleveland, starting as early as mid-March. The agreement allows the port to add a second ship for a twice-monthly service, as demand increases.
“Providing scheduled, reliable capacity to America’s industrial heartland via the Great Lakes/St. Lawrence Seaway routing will enable shippers to connect more efficiently to the European continent,” said Bart Peters, manager of The Spliethoff Group’s America service, in a statement.
Friedman said the proposed ship for the service will be multipurpose to handle both containers and breakbulk cargo, and weigh in between 12,000 and 13,000 deadweight tons. “We’re anticipating 300 to 400 containers – a mix of 40s and 20s – to be loaded on these ships,” he added.
“Geographically, we’re in an advantageous spot,” Friedman said. “When vessels exit the seaway and into Lake Erie, we’re the first port in and the last port out on the system.”
According to the port’s data, “there’s certainly plenty of volume between Ohio and Europe,” Friedman said. “We think we can be pretty balanced with this service.”
In addition to its bulk staple of iron ore, Cleveland has experienced an increase in recent years of specialty steel imports from Europe at its docks.
“We’re not looking to capture a large [container] market share here,” Friedman said, adding that the service will only handle about 10 to 15 percent of Ohio’s containerized trade with Europe. “Northeast Ohio to the East Coast ports [by truck and rail] will remain the most prevalent routing” for the region’s container shippers.
Containers for the new service will be handled at Cleveland’s Dock 22, a 15-acre site with capability of being expanded to 20 acres. Employees of Federal Marine Terminals will handle the boxes on the terminal. Initially, the service will employ two large crawler cranes to load and offload containers. The Spliethoff Group’s multipurpose vessels also have onboard cranes to handle freight.
The port is also served by Class I railroads CSX and Norfolk Southern, and has close highway connections to the Ohio Valley’s major truck-served corridors.
In Europe, Spliethoff Group’s vessels will call at one of Northern Europe’s biggest container ports. Antwerp offers highway and rail connections for containers into Europe’s hinterland. In addition, from the Belgian port, Spliethoff Group offers vessel feeder services for containers heading to markets in the Baltics.
Friedman, who spent 10 years at the Port of Seattle as director of seaport strategic planning, among other management roles, four years as CEO of the Ports of Indiana, and from 2004 to 2009 as vice president of ports and logistics at Duke Reality Corp. in Ohio before joining the Port of Cleveland, realizes the Cleveland-Europe Express service faces plenty of naysayers based on the historic lack of success of past all-water container services to and from the Great Lakes. But so far, he’s optimistic, based on the “positive reaction from the market place.”
A major impediment to the service, however, will be the winter, when between late December and early March the western portion of the seaway and Great Lakes fill with ice and shut down to international vessel traffic. During these months, the Cleveland-Europe Express will continue to serve Ohio’s shippers but via intermodal or truck to a Northeast coastal port for outbound transport on board a Spliethoff Group vessel, Friedman said.
Meanwhile, Cleveland’s bread-and-butter cargo remains bulk iron ore, which is extracted from the Great Lakes region’s mines and fed to large mills for processing into steel.
The port’s bulk terminal handles both iron ore and limestone. In 2013, about 3.14 million short tons were handled, compared to about 2.9 million short tons a year earlier. This was the highest annual tonnage handled at Cleveland’s bulk terminal since the 2006 shipping season.
Cleveland’s general cargo volume, which includes steel imports, heavy machinery and other breakbulk freight, reached 405,412 metric tons in 2013, compared to 355,409 metric tons the year before. This was also the highest reported annual tonnage for general cargo at the port since 2006.