Duluth Port Adapts to Changes as Coal, Wheat Demand Decreases

By KBJR News 1

January 3, 2013 Updated Jan 3, 2013 at 11:41 PM CDT

Duluth, MN (NNCNOW.com) - While taconite, limestone, and iron ore have been in steady and strong demand this shipping season, Duluth Seaway Port Authority Public Relations Manager Adele Yorde says the demand for coal has gone down as countries shift toward renewable energy.

"The real downturn happened a couple of years ago when the Canadian provinces announced they were really moving toward renewables—hydroelectric, bio–fuels, natural gas. So, that took a big hit out of what the outbound coal was for our local coal terminal," said Yorde.

But, adaptation to a changing market and an increased demand for coal in Europe has led ports to get creative and utilize the Canadian ports that were once the coal's destination as the new middle–man for overseas shipping, strengthening Duluth's reputation as an international port as well.

"So, while they haven't been able to necessarily replace the 7–8 million tons that was lost with the changeover in Canadian use, they have been able to move up toward about 3 million tons exporting coal," said Yorde.

According to the port's Trade Development Director Ronald Johnson, the demand for spring and durum wheat—another top commodity for the region—has also been on the downturn.

"Our volume is down primarily because there's good quality spring wheat and durum wheat, and actually winter wheat, around the world that's closer to the customer," said Johnson.

But everything can change and history supports that. Johnson cited the Russian wildfires in 2010 as an example of that change.

"Russia, the Ukraine and that area had drought and wildfires and they quit exporting. Then, our markets went crazy," said Johnson.

But the big question: will the nation's drought—which could be the costliest environmental disaster in U.S. history—affect shipping on the Great Lakes, since it has already had major impacts on shipping along the Mississippi River?

That answer, say officials, is a resounding 'maybe.'

It all depends on where the shipments are going, the 2013 markets, and 2013 freight rates.

Officials say the Duluth port is still on track to meeting its cargo handling goal of 37 million tons before the end of the 2012 season, which is on schedule to close January 15th.

Posted to the Web by Billy Wagness