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Seaway official says cargo growth is a lock

Tourists look at the Welland Canal and see mighty ships gliding through the locks. Bruce Hodgson sees something else, too: business opportunities. Hodgson, director of market development for the St. Lawrence Seaway Management Corp. since 2006, says the waterway is making headway competing with trucks and rail for more cargo. Hodgson said he is upbeat about the new navigation season, heralded by the recent "top hat" opening-day ceremony in St. Catharines, Ont.:

>Q: Do the shipping lines compete to have the first vessel into the canal each year to receive the "top hat"?

A: Absolutely. We have a number of requests each year. This is the first year we've been able to do it with McKeil [Marine], so we like to try to appeal to all of our different stakeholders each year, so we try to alternate it the best we can.

>Q: How do you make the Seaway competitive with rail or truck for moving cargo?

A: It starts with our promotion and awareness campaigns, where we have promotion and awareness around the fact that the marine mode is more environmentally friendly. We then will work with, as we did in the case of steel slab that was moving from Cleveland into Hamilton [Ont.], we'll work with the carrier and contribute where we can from an incentives standpoint, as it relates to costing. So we have the ability to work with our carriers to try to generate more business in that regard.

We continue with our new-business incentives. Cargo that's been moving by a different mode previously that is shifted to the marine mode will qualify for those incentives as well. And what we're finding is, with our incentive business that we've generated, most of that business, once we've secured it, it continues to move within our system. To put this in perspective, over the last four years, we've generated 7.5 million [metric] tons of new cargoes moving through our system, which generates $12.5 million in toll revenue.

>Q: What is the outlook for cargo shipments on the Seaway this year?

A: We are projecting another 3 percent increase in cargo volumes, which will put us at 38.6 million [metric] tons. We see a number of areas where we think there will be improvement. We think that the U.S. grain shipments' volumes should improve versus last year. We're also seeing iron ore exports continuing to increase through our system, along with coal that's moving for export into the European market. We continue to watch the European economy, which is our biggest challenge moving forward. Europe is our largest market, so obviously whatever happens economically over there has an impact on our system.

>Q: What other parts of the world are served by vessels from the Seaway?

A: We service 59 different countries globally. We've got Europe, the Middle East, being the Mediterranean [Sea], and also Africa and South America would also be our other key markets. We do also service China.

>Q: How many people does the Seaway employ?

A: We have 575 employees across the whole system. There's about 280 here in Niagara [in Canada].

>Q: What are the major industries that use the waterway?

A: Iron ore, steel, and of course steel, you've got coke and coal that are related to steel. You also have the wheat and the grain sector. Salt for example, is another big one that we see coming through our system on a regular basis. We also have cement that moves on a regular basis into the U.S.; all of that product goes for exporting into the U.S. So we have a real variety in terms of our commodity base.

>Q: What is the Seaway's growth potential?

A: Within our existing locks and channels, we have the available capacity to double our cargo volumes. We are continuing in 2012 to keep our tariff toll levels the same level as 2008, so this represents the fifth year that we've held our toll levels without an increase.

>Q: The winter was mild this year. Did you consider opening earlier than March 22?

A: Our opening is based on our maintenance schedule and how we're able to complete our maintenance when we're down, and also based on [customer] demand. This year we were not pressed in terms of demand for opening. We will also be reviewing as we go through the season in terms of our closing dates, again as it relates to customer demand.

>Q: What is the condition of the Seaway's infrastructure? Do you need to make any improvements?

A: We're in good shape. Our asset renewal programs were $59 million per year, of which in Niagara we've invested $30 million in this last year, which goes directly into the local economy. Overall our system is in great shape.

>Q: What economic impact does the Welland Canal have on the region?

A: Overall, if you look at Ontario, recent data we've seen through the Martin [Associates] economic study is that there are 64,000 jobs in the province of Ontario that are attributed to the marine sector. If you break that down in the case of the Port of Hamilton, for example, there's 38,000 jobs that are directly attributed to the marine industry. It goes down three or four levels within the economy, down to the taxpayer level.