By IAN ROSS
The team of logistics experts studying Sault Ste. Marie’s transportation hub concept suggests pursuing opportunities in “rail-to-road markets,” but recommends ditching the air and marine cargo ideas.
Their market assessment of multi-modal opportunities states the Sault’s location is ideal to ship wood, pulp and paper from Northern Ontario to markets in the U.S. Great Lakes region and is perfectly positioned as an alternative transportation compared to other congested freight-handling facilities.
The study was prepared by a team from KPMG, Marshall Macklin Monaghan and RGF Consultants.
The consultants say routing containers from Asian countries through the Sault for redistribution into the U.S. could shave transit times for customers by as much as four days, than through already congested ports and railyards in the U.S.
But their report warns against pursuing air cargo opportunities since that business is fiercely competitive. The value of freight shipped by air is relatively high value, but the volumes are low.
While the Sault is the fourth busiest Canadian Great Lakes port, thanks to Algoma Steel, the report states the city’s location is “too far from the action” to expand freight opportunities.
Algoma Steel does own and operate a seaway draft ‘export dock’, but it is regarded as a private harbour.
The three consulting firms were hired to build the Sault’s business case as an international transportation hub to capitalize on the growing movement of containerized freight from Asia to U.S. markets.
In interviews with shippers, the report says there were concerns expressed about existing supply chain congestion and there’s “strong interest” in investigating alternative routes. Some would be willing to ship large volumes, “if sufficient benefits can be demonstrated.”
But the executive summary released to Northern Ontario Business provides no details on any potential back haul freight opportunities through the Sault for shippers and carriers.
“What (the consultants) identified is there’s not a huge amount of back haul opportunity,” says Bill Therriault, director of Destiny Sault Ste. Marie, a city hall-based economic diversification agency. “But for those containers there’s no back haul opportunity for where they’re going now either, so it’s a zero sum equation.”
With city council’s approval, the consultants are proceeding to the next phase of study with an analysis of the Sault’s transportation infrastructure.
The city has made some small steps towards branding itself as a transportation hub with last year’s opening of the truck corridor to the International Bridge and a privately-owned intermodal facility with a rail link.
However the posture of the major railways servicing the Sault ranges from dismissal of multi-modal opportunities to mild interest.
Canadian National Railway (CN) has publicly stated there isn’t sufficient two-way freight traffic to warrant diverting containers from already established routes through their container transfer yard in the Greater Toronto Area and across their track in northwestern Ontario to intermodal yards in Chicago.
CN also operates the former Algoma Central Railway which connects to its transcontinental line at Oba and runs south to Sault Ste. Marie and the U.S. border.
However, Canadian Pacific Railway (CP) is more receptive if shippers demand it.
CP spokesman Ed Greenberg says while their intermodal network works well with the current system of ports, reload centres and customer facilities, they’re always open to “viable new opportunities.”
“We want to be clear we’re in the business to meet the shipping needs of our customers. If there are new opportunities to further enhance our customer service, we’ll certainly look at it.”
CP leases a branch line between Sault Ste. Marie to Sudbury to a short line railway. The 300-kilometre line connects with CP’s main line at Sudbury.
