Transportation Savings of St. Lawrence Seaway Minimal

Friday, November 04, 2005
John Taylor has spent months analyzing traffic flows on the Great Lakes and St. Lawrence Seaway to measure the economic benefits. The associate professor of marketing at Grand Valley State University said he was surprised by what he found. "The transportation savings associated with the Seaway's overseas trade are about $55 million annually," said Taylor. "It's not a very big number; I thought it would be a bit more than this." Taylor said the principal conclusion of the study is that a cessation of ocean shipping on the Great Lakes would result in a transportation cost penalty of $54.9 million per year. He said the relatively low cost penalty is due to the fairly small volume of ocean tonnage, and the fact that rail, laker and barge options are quite competitive. The level of transportation cost savings associated with the Seaway is important to understand given the problems created by ocean vessel borne invasive species. Policymakers have long believed that the transportation cost benefits of ocean shipping were critical. However, the new information may lead regulators to rethink the level of controls on ocean ships entering the freshwater Great Lakes. Taylor's findings, funded by a grant from the Joyce Foundation in Chicago, are highlighted in a just completed three-part series on ocean shipping in the Great Lakes in the Milwaukee Journal Sentinel. Taylor admits shipping rates can swing significantly, but called his study an "accurate snapshot," for the annual economic benefit of opening the Great Lakes to the world.
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