Since 2014, when the Port of Cleveland created a shipping route to and from Europe, port leadership has been eager to see that service grow.
"The container business pretty much went away on the Great Lakes in the mid-'70s when the vessels started getting much larger and containerization really exploded," said Dave Gutheil, chief commercial officer at the Port of Cleveland. "The Great Lakes was forgotten about from a containerization standpoint."
Currently, container vessels haul about 90% of the world's non-bulk cargo. But the massive ships needed to transport the tens of thousands of containers the larger vessels can hold have been affected first by COVID-19 slowdowns and then by the surge in consumer demand that's overwhelming coastal ports around the world.
In the last 12 to 18 months, container shipping prices have skyrocketed, Gutheil said, while congestion at the ports of Los Angeles and Long Beach, as well as the ports of New York and New Jersey, has created logistical nightmares for businesses relying on foreign imports and exports.
The timing could not be better for a "niche service" that avoids the congestion issues on the coasts, Gutheil said, which is what the new transatlantic container service here, the Cleveland-Europe Express, offers.
Dutch company Spliethoff has partnered with the Port of Cleveland to provide container-only, regular monthly service through the St. Lawrence Seaway between the ports of Antwerp, Belgium; Picton in Ontario, Canada; and Cleveland.
In the past, similar routes in and out of Cleveland brought multipurpose vessels, transporting goods, raw materials, steel, heavy equipment and adding a few containers. By contrast, the new service will ship containers only.
The route, which takes 12 days to travel from Antwerp to Picton and a total of 15 days from Antwerp to Cleveland, is attractive to Ohio and other Midwest companies looking to shorten travel times, Gutheil said.
"These are shorter shipping times because you don't have to send something all the way out to the East Coast or West Coast by rail to get it on an actual ship, and then wait once the cargo gets into those ports because there's so much activity there," Gutheil said.
Containers are sitting idle in the larger ports for days and sometimes weeks, he said, as shipping demand increases every August to October in preparation for holiday shopping, and labor shortages have exacerbated loading and unloading wait times.
These problems do not exist in Cleveland, where it takes cargo only a day or two to get unloaded and out for delivery.
"We can react to that fairly quickly, whereas you go into a big coastal port and there's just nowhere to go," Gutheil said. "There's a lack of space for containers and there's a lack of trucking availability."
The reasoning for Midwest companies to move shipping away from the coast to the Great Lakes is sound. The challenge, said Claus Sorensen, vice president of the Great Lakes and Midwest for Spliethoff, is convincing these businesses there is container shipping available on Lake Erie.
"We speak to professionals in our industry, claiming that it's not possible to bring in a ship like this into the Great Lakes," Sorensen said.
That, he said, illustrates how the Great Lakes region needs better marketing.
"If you don't know that there's something else, you're not going to go look for it," Sorensen said.
His company plans to take advantage of being the first and only shipping company to run a container-only vessel on the Great Lakes in this volatile market, he said. Benefits such as reduced shipping times are crucial now, he said, as backups mean the supply of available shipping containers is low, causing customers to delay exports.
"We decided that this is a good time to ramp up our efforts and offer even more alternatives to the customers around here, versus going through the East Coast or West Coast," Sorensen said.
Cleveland's smaller scale means cargo is easier to track and turnaround times and over-the-road distances are shorter, Sorensen said. He added that Great Lakes shipping rates are "competitive pricewise" with the bulk rates at coastal ports.
In Cleveland, as with other smaller ports, a business can track exactly when a container comes off the ship and can even travel to the port and visually confirm the location of the goods.
"Everything is so transparent," Sorensen said. "What it will come down to for customers is do they want to deal with the hassle of the East Coast and pay a little bit less, or do they want to take it straight to their back door and pay a little bit more?"
Trade through the St. Lawrence Seaway does have a unique hurdle, as the entire route shuts down in January for maintenance on the series of seven locks that enable commercial travel. The route typically reopens in mid-to-late March.
Cutting off transport for nearly three months is problematic. However, for companies able to ship and store goods, the Port of Cleveland established a Foreign Trade Zone, which permits the indefinite deferral on import duties as long as those goods remain on site.
"If you want to bring in material, say from south Germany, you could bring it in and stockpile it at the Port (of Cleveland). Then you will have it for distribution through those three months," Sorensen said.
The foreign trade zone permits businesses importing millions of dollars of goods to defer paying import taxes — currently at about 20% — until the goods are shipped out to customers, preserving cash flow.
The Peyton Lynn C, the name of the ship servicing the Cleveland-Europe Express route, arrived in Cleveland last Tuesday, Sept. 7, having set sail from Antwerp in late August with fewer than the 860 containers it is able to transport. However, the trip was on schedule and cargo began off loading the next day.
The containers include goods with destinations around Ohio and as far as Iowa. The Peyton then headed off to take Ohio exports to Ontario and through the seaway to Europe.
Gutheil and Sorensen are optimistic this is the first of many trips.
"The more cargo we handle, the more revenue flows through the port, and that means more jobs," Gutheil said. "We will keep pushing. Eventually, we want to make this a weekly service. That's the goal."
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Port of Cleveland adds first Great Lakes container-only shipping route to, from Europe - Crain's Cleveland Business
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