Great Lakes Ports Boost Container Shipping
Duluth and Cleveland ports are both now handling dedicated container ships, hoping to help ease congestion elsewhere.
Chippewa Valley Bean Company, the world’s largest processor and exporter of dark red kidney beans, initially didn’t worry too much about the transportation disruptions tied to the COVID pandemic. Company executives assumed it would be a short-term problem.
But when a year had passed and their 75,000-square-foot Menomonie, Wisconsin warehouse was almost overflowing with Midwest-grown kidney beans they couldn’t ship to their customers, they became increasingly concerned.
Josh Bronstad, Chippewa Valley Bean Company: “We have probably 20 loads to bag yet, but I'm out of pallets so I have to ship out before we can bag those.”
Traditionally, the company’s main export route was trucks to the Twin Cities, railcars to the Port of Montreal, and, ships to final destinations in Europe and other points around the globe. Delays during the pandemic’s first year were caused by labor strikes and work slowdowns at the Montreal port, by a shortage of shipping containers, and, after Chippewa Valley Bean tried to get product out of East Coast U.S. ports, by a months-long backlog in Chicago’s already overwhelmed container rail depot.
By the time two years had passed, the situation had gotten worse. The fall 2021 crop of dark red, light red and white kidney beans was arriving from the fields of Wisconsin, North Dakota and Minnesota, threatening to flood an already full warehouse.
Cindy Brown, President, Chippewa Valley Bean Company: “Now the container shortage is just really, really bad. We cannot locate containers at all. So we had a freight forwarder that worked with us and we just started bringing containers outta Chicago ourselves…Chippewa paid for that out of our own pocket. Okay. We're loading containers. Now we think we've got that problem solved…Wrong. CP Rail, because there weren't enough loaded containers coming into Minneapolis, they weren't taking containers back out.”
Brown says they assumed the limits on containers leaving the Twin Cities on Canadian Pacific Railway, which began around Thanksgiving 2021, would ease after the holiday rush.
Cindy Brown, President, Chippewa Valley Bean Company: “They didn't. It just slowed down. It slowed down through the first of the year. And it got to the point where CP was only taking 100 containers a week, 20 containers a day, out of the entire Minneapolis area. You know, that's everybody in North Dakota, that's Minnesota, that's western Wisconsin, that's Iowa. I'm like, ‘Come on, folks. What are you thinking? We can't live like this.’”
Finally, this summer, Chippewa Valley Bean found a stop-gap solution that may provide long-term relief for other Midwest companies facing similar shipping barriers.
That solution came in the form of the Port of Duluth-Superior. A place not previously known as a significant container-exporting location.
Jonathan Lamb, president, Duluth Cargo Connect: “The Chippewa Valley Bean shipment was our first export container move. We’ve certainly exported other commodities, but not containerized before.”
The Duluth Seaway Port Authority, a public entity working with a private warehousing company under the shared name Duluth Cargo Connect, had already spent about five years and $35 million on infrastructure improvements that would mean better rail-to-water service. They saw an opportunity to leverage those improvements by seeking federal approval to handle larger dedicated container ships for importing and exporting.
Jonathan Lamb, president, Duluth Cargo Connect: “Cleveland…had already been grandfathered in because they were doing a unique container program over there. No other port on the Great Lake side of the U.S. was set up for that so we went ahead and completed that regulatory step and added an inspection station here at our facility with U.S. Customs. That approved Duluth to be the second port on the Great Lakes to handle containers….A few years ago, it didn’t matter as much because the supply chain was pretty smooth in the world, right?.... But it’s significant because we can offer an alternative to the coastal ports.”
A company called Nexyst had already been working on the development of field-to-customer shipping containers that will control humidity and temperature while tracking location. Nexyst accelerated its modified container preparations once company founder Dennis Pap realized they might be able to help solve Chippewa's shipping problems using the Duluth port.
Jonathan Lamb, president, Duluth Cargo Connect: “Between him and then you take a Chippewa Bean that was really willing to try something new in their supply chain, you couple them with what we did to get set up regulatory-wise, it was the perfect recipe of everybody working together to create something new and different.”
An overdue shipment of 194 containers of kidney beans went out of Duluth on the 453-foot-long Nunalik in May this year.
Jonathan Lamb, president, Duluth Cargo Connect: “Everybody was busy, but, at the same time, there was quite a bit of pride in seeing that happen. No doubt about it.”
Chippewa expects a repeat shipment out of Duluth or Cleveland this fall.
Going forward, Lamb says they don’t expect to compete at a scale with the much-larger coastal ports, especially considering that the St. Lawrence Seaway’s winter ice means the route to the ocean is closed two to three months each year. But officials with the ports of Duluth and Cleveland hope to serve regional customers like Chippewa Valley Bean when they are faced with a warehouse full of product with nowhere to go.
Jonathan Lamb, president, Duluth Cargo Connect: “We’re not gonna be an LA/Long Beach, you know. We’re just not. We’re not gonna be a Seattle/Tacoma, and that’s okay. I think our feeling is we have a unique niche service that we can offer here that’s probably a higher-end service, more customer friendly than you’d get through a bigger coastal port… We don’t expect anybody or want anybody to take all their eggs, all their product moving and put ‘em in one basket with us with us, but we can be a relief valve.”
Cindy Brown, President, Chippewa Valley Bean Company: “I think our Great Lakes are not being utilized as much as they might be able to…Whether it’s Cleveland being able to ship out of that area to go into Europe or it’s the Port of Duluth, I’m hopeful that will continue on because… we’ve got this whole pressure cooker of transportation issues and it’s one more viable route that relieves some of that pressure.”
By Colleen Bradford Krantz, firstname.lastname@example.org