Tag: dock

Doubling Down

There’s a lot of highly negative press right now about how useless government is, and how broken everything is, so it’s refreshing and nice to see how one city and small port decided to take their future into their own hands. Just this week, after a difficult yet encouraging season trying a brand new direct shipping service between Cleveland and Antwerp, the Port and its Dutch partner decided to add a second ship for next year. Not only that, it seems this highly risky and daring venture has the full support of the local community. We could all learn something, here, I think. Check out this editorial from the Cleveland Plain Dealer September 24 2014:

Port of Cleveland, Dutch partner expand port’s smart trans-Atlantic gamble: editorial

“Dead in the water” seemed an appropriate descriptor for the Cleveland-Cuyahoga County Port Authority when Adam Wasserman was at its helm between 2007 and 2009.

The taxpayer-floated agency was adrift in a Sargasso Sea of pie-in-the-sky strategies – the most infamous of which was Wasserman’s $500 million plan to relocate the port from its current site to a yet-to-be-created landfill north of East 55th Street.

What a difference five years and new leadership make.

Today, among other initiatives, the port is full steam ahead on a welcome and innovative venture aimed at making Cleveland a global cargo hub.

The Cleveland-Europe Express, the only direct shipping service between the Great Lakes and Europe, weighed anchor last spring.

The port inked a two-year deal with the Spliethoff Group, the largest shipowner in the Netherlands, to charter a vessel for monthly cargo runs across the pond. It’s already helped diversify cargo through the Cleveland port and helped increase cargo runs through the St. Lawrence Seaway.

“The status quo was not acceptable to me or the board,” said port President Will Friedman, who came on board in 2010. “We want to become a real Midwestern hub for companies trading internationally.”

The venture remains a gamble — the Cleveland-Europe Express has lost nearly $3 million since its launch in April, more than five times what had been projected.

But instead of shelving the idea before it can be fully tested, the port’s Dutch partner decided to put some of its own skin into the game and add a second ship to the trans-Atlantic service.

“We like it. More important, our customers like it,” Torin Swartout, a Spliethoff vice president, told Plain Dealer business reporter Robert L. Smith.

The greater frequency of voyages makes the port initiative competitive with East Coast ports, Swartout said. “We’re doubling the frequency, but we expect to more than double the cargo we ship.”

Proponents note the service offers a quick, cost-effective – and greener – alternative for businesses to transport goods through the Saint Lawrence Seaway to Europe rather than moving them by rail to East Coast ports and then across the Atlantic Ocean.

Startup hasn’t been cheap. The port ponied up $550,000 a month, plus fuel costs, to charter the Fortunagracht.

Friedman and his crew are taking the port into uncharted waters.

And that may be exactly where the future is.

Grit in the Heartland

Cleveland Harbor

This is the Port of Cleveland, at the mouth of the Cuyahoga River on Lake Erie. That little ship on the left in the picture is the Fortunagracht, a Dutch general cargo vessel, 12,000 tons.  The Port has access to the world’s seas through the St. Lawrence Seaway, which is open eight or nine months of the year and frozen solid the rest. The port handles about 13 million tons of cargo a year, mostly materials for cement plants on the river and a big 800 acre steel complex at the head of the river, 6 miles upstream through three 180 degree turns. 600 to 700 ships a year go up that narrow winding river every year and come back down, some ships 700 feet long. More about the river system later. The port piers in the picture here are right next to Brown’s Stadium, right downtown, 80 acres, four or five berths, 300,000 square feet of warehouse space, mostly for imported steel products. About 50 inetrnational ships visit this faciity every year. (By that I mean, not US or Canadian ships plying the Great lakes system with iron ore, taconite, and liestone. Of the 260 remaining US flag deep sea cargo ships still sailing, 60 work on the Great Lakes. Last year at this time I was on the 261st US flag ship, the President Truman, heading for the breakers in India.)

Cleveland has had some hard times, like much of the industrial heartland around the Great Lakes. Once a city of nearly a million people, less than half that many live there now. Like Detroit and other midwest cities, the inner core is filled with abandoned homes and a diminishing tax base. Nearly 50 years ago, now, the Cuyahoga River caught fire, for the 13th time in the last century and a half, and it was this fire that caused the Clean Water Act and a number of other environmental laws. The story beyond northeast Ohio has been Cleveland has been sinking, failing, and losing ground. But don’t tell that to the people who live there. Especially now, what with the city getting the 2016 Republican Convention, Johny Football Manzell for the Browns, and LeBron James deciding to return to his home state and the Cleveland Cavaliers. Cleveland’s had a good run since this last spring and I was lucky enough to be there, for the first time in my life, except for driving through in 1967 and 1968 on I-90.

Last fall the Port of Cleveland-Cuyahoga County, a terrific small operation staffed by 18 people and governed by commissioners appointed by the Mayor of Cleveland and the Administrator of Cuyahoga County, made a choice to take their future into their own hands.  The Port had been led down one road by a previous Port Director who wanted to spend millions competing head to head with big US East Coast container ports, a totally flawed concept which soon became clear. For years ship visits to Cleveland had been diminishing and some were suggesting the port as an entity was doomed. The current Port Director, though, Will Friedman, his excellent staff, and his Board of Directors, lacking nothing in courage, strength of conviction, and titanium balls, decided there might be a market for a new liner service between Cleveland and Europe, direct sailings, through the Seaway. Their argument was that all the international cargo now shipped from the midwest must now be trucked or shipped on rail to an East or Gulf Coast port, hundreds of miles, and then usually sit in the yard somewhere for days before being placed on a ship. Why not, instead, ship a much shorter distance to Cleveland, load on a ship there, and send it directly to Antwerp and a hub for the rest of the world? Direct, fuel efficient, and faster.

They – the Port staff – did some market research, some studies, went to Europe, talked to shippers and manufacturers, and heard some interest. Of course they also heard all the reasons the many people in the Never section listed:

The Seaway is closed a third of the year what do you do then?

If you ship to an East Coast port and miss a ship there’s another the next day or two, always to the same place. In Cleveland if you start with one ship it comes once a month. If you miss that sailing that’s a long wait. Too long.

Nobody will dare take a risk and commit to a new untried service that is shaky at best and unknown.

You don’t have proper container cranes or handling gear and will never be able to handle them fast enough to be competitive.

Any ship coming through the Seaway is at the biggest 35,000 tons and most much smaller, and this flies right in the face of the trend to larger and larger ships. I mean, they’re widening the Panama Canal for such ships.

Oh, the list was long. Long.

But you have to understand, here, that this is Cleveland, one could say a nothing to lose city, a place that had seen the bottom of the pit and knew what it felt like. Backs to the wall. If the port did nothing, nothing would happen. The ship visits would continue to decline, the facility would continue to get old and tired, and whatever had been here in the way of maritime jobs and commerce would leave as so many other sectors had left. For sure, no vessel owner would ever consider starting an untried and new service to a small port on an inland sea. Ships are expensive. The cost to charter a ship of 12,000 tons, which is about as small a ship as you can imagine for such a service, is at least $ 500,000 a month for the ship, crew, stores, and operation. Now add to that the fuel. One round trip back and forth from Antwerp to Cleveland will require $ 350,000-$400,000 in fuel and thousands more in pilotage charges through the seaway. Call it, a million a month before even considering stevedoring costs to handle the cargo.

The only way such a service could be started would be if the Port itself chartered  a ship, paid for the fuel, and in partnership with a vessel owner booked and handled cargo. The Port found a partner in a Dutch Company, Spleithoff, located Amsterdamn, a 100-vessel feet owner, specializing in mixed project cargo ships – ships built to carry both containers and special cargoes, or project cargoes, heavy lift items, odd shaped pieces, big pieces of machinery and equipment. The Port chartered a ship. Filled it with fuel.

In November of 2913 the Port Directors voted to do this. The Port was in good shape financially, but this is a small port, with operating revenues of about $ 3,000,000 a year. Imagine – you charter  ship that will cost you, each month, one third of your annual operating income. For a start-up, an unknown and untested trade route, competing with east coast ports, and understanding that with any start up you don’t make money right out of the gate. You do this because you want and believe there are cargoes and goods within your region that need such a service, that will see the value of direct shipment to the world, avoiding the trucking and fuel costs of east coast truck or rail delivery. You do this because you believe in your port and your city and region and because unless you try it nobody will.

You think you will capture a lot of containers and some portion of project cargo. You spend the months from November 2013 until April 214 chasing bookings in both the United States and Europe. Spleitfoff places a couple of people in the Port offices in Cleveland for sales, and others in Europe for the trade there. Spleithoff selects a sweet little ship for the service, a 600 foot, 12,000 ton multi purpose mixed cargo vessel, built in 2011, nearly new, crew of 18, fuel efficient, with three deck mounted cranes and holds that can handle everything from bulk to project cargo to containers and mixtures in between.

This is the ship that departs Antwerp about the first of April, 2014, carryring some empty containers for use back in Cleveland and virtually nothing else, the first westbound voyage. The ship leaves Antwerp just about as I get on the plane to fly to Cleveland to provide some help to their staff there, because I worked with Will years ago at the Port of Seattle and we’d spent some time in the Olympics together on steep snowfields and survived, and he’d contacted me, said he needed some help, so I headed east, found an Amish farm to live on outside the city, and with the rest of them waited for the ship’s arrival.

This is the ship:

Fortunagracht

The first morning I rose before heading to the port, here’s what I saw:

Parkman sunrise