Ontario Marine Transportation Study Phase II Final Report Market Issues, Competitiveness, Opportunities, and Recommendations
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Ontario Marine Transportation Study Phase II Final Report Market Issues, Competitiveness, Opportunities, and Recommendations Prepared For Ontario Ministry of Transportation and Ontario Marine Transportation Forum Prepared By MariNova Consulting Ltd. Research and Traffic Group Gardner Pinfold CPCS June 2009 Ontario Marine Transportation Study – Phase II Final Report i Table of Contents Executive Summary................................................................................................. i 1.0 Introduction.....................................................................................................1 1.1 Background ................................................................................................................ 1 1.2 Objectives................................................................................................................... 1 1.3 Organization of this Report......................................................................................... 1 2.0 Major Issues Assessment..............................................................................3 2.1 Infrastructure Issues ................................................................................................... 3 2.1.1 Methodology.............................................................................................................. 3 2.1.2 Overview of Ontario marine sector infrastructure needs............................................ 3 2.1.3 Port infrastructure needs and plans........................................................................... 4 2.1.4 St Lawrence Seaway................................................................................................27 2.1.5 Proposed infrastructure investment guidelines.........................................................31 2.2 Policy Issues............................................................................................................. 34 2.2.1 Canadian shipping policy..........................................................................................34 2.2.2 Coasting Trade Act...................................................................................................35 2.2.3 The duty issue ..........................................................................................................38 2.2.4 Pilotage ....................................................................................................................43 2.2.5 Manning....................................................................................................................45 2.2.6 US harbor maintenance fee (HMF)...........................................................................45 2.2.7 Fees and tolls...........................................................................................................46 2.2.8 Customs ...................................................................................................................48 2.3 Environment Issues.................................................................................................. 49 2.3.1 Aquatic invasive species and the Great Lakes/Seaway ...........................................49 2.3.2 Water levels and the Great Lakes ............................................................................51 2.3.3 Environmental legislation..........................................................................................53 2.3.4 Discharges into the water.........................................................................................53 2.4 Labour and Skills Shortages .................................................................................... 55 2.4.1 Overview and profile of labour in the Ontario marine industry..................................55 2.4.2 Skills shortage in the Ontario marine sector.............................................................57 2.4.3 Summary and implications of skills shortage for Ontario marine industry.................60 2.5 Economic Issues ...................................................................................................... 60 2.5.1 Economics of ship size .............................................................................................61 2.5.2 Economics of travel time ..........................................................................................62 2.5.3 Minimizing transfer costs: Self-unloaders versus bulkers.........................................62 2.5.4 Costs of new ships versus rehabilitation...................................................................63 2.5.5 Economics of environmental compliance .................................................................64 2.5.6 Economic costs of winter Seaway closure................................................................64 2.5.7 Economic costs of marine traffic control and user fees ............................................64 2.6 Market Issues ........................................................................................................... 65 2.6.1 Market share and trends...........................................................................................65 2.6.2 Trends affecting Ontario marine activity ...................................................................72 2.6.3 Other trends .............................................................................................................73 2.6.4 Modal competition ....................................................................................................75 2.6.5 Churchill ...................................................................................................................78 2.6.6 Containerization .......................................................................................................79 2.6.7 General cargo...........................................................................................................82 3.0 Competitiveness Assessment .....................................................................83 3.1 Strengths .................................................................................................................. 83 3.1.1 Stability of client base...............................................................................................83 3.1.2 Lower linehaul operating costs .................................................................................83 3.1.3 Available capacity for traffic growth within Seaway and port infrastructure ..............83 3.1.4 Low energy consumption and GHG emissions per tonne-km...................................83 3.1.5 Ability to handle heavy and large dimension machinery and equipment ..................84 3.2 Weaknesses ............................................................................................................. 84 June 2009 Ontario Marine Transportation Study – Phase II Final Report ii 3.2.1 Government investment in and commitment to maintain essential infrastructure.....84 3.2.2 Load transfer and inventory costs ............................................................................85 3.2.3 Vessel fleet – age and vessel type...........................................................................85 3.2.4 Longer transit times and less frequent service than other modes ............................85 3.2.5 Lack of direct access to other than shore-based clients ...........................................86 3.2.6 Seasonality of service...............................................................................................86 3.2.7 Government imposed fees and constraints ..............................................................87 3.2.8 Dimensional constraints of the Seaway system .......................................................88 3.2.9 Low water levels .......................................................................................................89 3.3 Opportunities ............................................................................................................ 89 3.3.1 Selective attraction of traffic from competing modes or routes .................................89 3.4 Threats ..................................................................................................................... 91 3.4.1 Potential effects of industrial globalization and government policies ........................91 3.4.2 Environmental issues (aquatic invasive species, toxic emissions) ...........................92 3.4.3 Environmental regulations........................................................................................93 3.4.4 Seasonal fluctuations in demand..............................................................................93 3.4.5 Labour force issues ..................................................................................................93 3.4.6 Competing land use priorities in and around ports ...................................................93 4.0 Opportunities Assessment ..........................................................................95 4.1 Best Practices........................................................................................................... 96 4.1.1 The Baltic .................................................................................................................96 4.1.2 The European short sea sector ................................................................................98 4.2 Status of Initiatives ................................................................................................