3.5 Billion Dollar Business In Trouble?

Great Lakes Shipping

The Midwest has always been a shipping hub of North America and by extension the world. The St. Lawrence Seaway shipping system alone, which connects the Midwest and the Atlantic Ocean, is responsible for over $3.5 billion of business every year. The most pressing danger to this critical trade route is climate change and it threatens the most basic element of the shipping process: the water.

First, let’s establish the importance of the water in the actual shipping of imports and exports. Obviously, the water is necessary to be able to transport a ship but the water level is extremely important in determining how much cargo a ship can transport. And the amount of cargo a ship can carry translates to efficiency and profit.

For example, for every inch of water depth lost, a 740 foot ship will lose 100 tons of capacity. Lighter shipping loads due to decreased water levels could lead to as much as a 30% increase in shipping costs.

Now that we have discussed the ramifications of decreased water levels, we need to address the cause: climate change.

Climate change affects so many aspects of world climate; from oceanic currents to longer summers to drastic weather patterns. For Great Lakes shipping routes, climate change means higher temperatures and faster evaporation. For an industry dependent on water, evaporation rates are critical. Climate models predict that Great Lakes water levels will decrease by one to two feet over the next century due to the effects of the climate change. As we discussed before, the loss of an inch of water depth has serious consequences and scientists are predicting losses of up to 24 inches.

Mitigating the effects of climate change on the Great Lakes is very costly. We mentioned that companies can light-load their ships (sacrificing cargo carried because of the shallower lake depths). Another costly option is dredging shipping channels and harbors, but even this is only a temporary measure.

One projected benefit of this climate change is longer summers, which translates to more ice-free days to ship. When winter comes, companies have to break through the ice to ship cargo. Longer summers would mean less ice-breaking costs, and these costs would slightly offset the costs of lighter cargo loads.

By Michael Crawford






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