By Benjamin Glick
Ships in the Port of Muskegon could begin handling cargo as early as Spring 2017 if area business leaders agree to commit freight to a proposed trade route connecting the West Michigan city to the Port of Milwaukee.
At an event held in the L. William Seidman Center, Pew Campus of Grand Valley State University on Oct. 19, leaders in logistics, retail, and manufacturing across the Great Lakes region gathered to discuss the latest developments for the proposed redevelopment of Muskegon’s harbor facilities and the broader use of the city for cross-lake transport and trade.
As one of the few natural deep-water ports on Lake Michigan, business leaders plan to bring a “multi-modal logistics gateway” to Muskegon, starting with connecting the city’s maritime services to Milwaukee in order to bolster regional trade while also reducing costs and risks to companies that rely on getting their goods from one place to another.
“We are blessed and we enjoy a lot of what Michigan has to offer,” Les Brand, CEO of Supply Chain Solutions, Inc. told business leaders. “Our history in Michigan is built on waterways. It was the main vehicle for commerce supporting the Michigan economy.”
“The Chicago Problem”
Once the national highway system was established, water traffic in ports like Muskegon dried up, and today freight travels south to an “east-west thoroughfare” in order to access seaports on the east, west, or gulf coasts.
For companies across the Great Lakes region, this has meant tolerating traffic congestion as the route down passes through the unavoidable Chicago highway bottleneck.
“That drive south costs money, and with the growing congestion in rail traffic and truck traffic by volume, Chicago is really one of the worst pinch points in the country,” Brand said.
This reason, more than any other, is the primary driver behind the Muskegon-Milwaukee trade route development. The potential for the port plans to decrease travel time is described as a solution to “the Chicago Problem”.
“From the northwest, Minnesota, the Dakotas, Wisconsin there’s a million trucks and they all have to go through Chicago,” he said. “There’s a half-million trucks going the other way. Just that truck volume trying to get around Chicago in growing density every year is going to get worse.”
Brand called for an alternative route that would bypass the I-94 corridor and ship cargo from Milwaukee rather than Chicago.
In addition to truck freight, 66 million tons of rail traffic also passes through Chicago annually, adding further strain to the city’s infrastructure. In 2003, the increasing traffic and resulting congestion prompted the city of Chicago to inject more than $4 billion into infrastructure improvements which concluded in 2015. However, these are considered to have had a negligible impact on traffic flow.
“It hardly made a dent,” Brand said.
Brand hopes a Muskegon to Milwaukee shipping route will be not only quicker than a land route through Chicago, but also cheaper.
“We’ve modeled rates on different fleets on different shipments, and right now we’re 20 percent under the baseline. It’s faster, it’s cheaper. Costs are going to go down.”
Brand, and other speakers at the conference said all that was necessary to get the plan off the ground was a small amount of freight commitment.
“Muskegon is ready now, and Milwaukee is ready for domestic traffic. In other words, loading 53-foot trucks both ways, we’re ready to do that right now. As soon as the boats get the gear we can get started. And that could be as early as November, but we don’t have shipper commitment yet. So the next step: I want ten percent of your volume in that lane to activate the service.”
Once activated, the next part of the process is actually getting goods across Lake Michigan where they can be transported elsewhere without having to go through Chicago. In addition to addressing the “Chicago Problem”, future plans expect to service multiple Great Lakes cities and connect them to “Asia and beyond” via the intended waterway trade routes.
But first, goods will have to get to Milwaukee, which will be impossible without two things: ships and cargo.
Johnathan Van Wylen, head of operations and co-founder at Eco Ships, a Muskegon area start-up assigned with the task of securing vessels for the project, identified several classes of vessels suitable for shipping goods across Lake Michigan.
“This is a free highway that is being underutilized,” he said.
For many Lake Michigan ports, including Muskegon, finding and maintaining navigable waterways is an essential but expensive part of keeping trade routes viable. However, offshore supply vessels (OSVs) can use pre-existing infrastructure without the need for extensive dredging, greatly reducing the cost of making port facilities usable.
In addition to their versatility OSVs will be valued for their shallow draft which enables them to operate in waterways as shallow as 10 feet, and their dynamic positioning which gives these vessels the special ability to be “put in park”.
“They’re designed to sit under an oil rig,” Van Wylen said. “But for us they can do cargo transfers in any kind of weather. It’s basically a floating pickup truck.”
And the capability of these ships to operate in Lake Michigan’s icy winter conditions means service will be available year-round.
While the OSV is commended for its flexibility, other, larger ships able to carry more than 100 cargo containers, with roll-on/roll-off capability, are also in consideration. The potential for larger vessels means underused ports across the Great Lakes could be quickly and easily developed, making a trans-lake trade network a possibility.
Once given the go ahead the first Muskegon-Milwaukee trade ships would arrive in a matter of weeks, and if successful Eco Ships has outlined plans for custom-built ships with larger capacities.
As the economy recovers sluggishly, apprehension remains among companies to commit to such an ambitious plan, but Mary Elisabeth Pitz, founder and CEO of Mary Elisabeth Pitz & Associates (MEPA), had some words of encouragement.
“We’re living in a period of great transition,” she said. “And this births fear in a lot of people, but in others, it births hope. They start looking at opportunities and they look at what had previously been considered problems and come up with innovative solutions.”
MEPA also organizes the annual Rail Supply Chain Summit, which will convene on June 14, 2017 in Chicago with hopes of drawing further support for the project. Pitz said more than half a billion dollars in deals has been initiated from the summit, and some of it may be available for investment.
Raising her support for the project, Pitz said it would have positive effects on the regional and national economy.
“What this does is open up the markets in Michigan, Wisconsin, ultimately Minnesota and surrounding states in a new and dynamic, but most importantly efficient manner and that’s what’s exciting,” she said. “It will reduce cost and minimize risk, logistically speaking, and it will produce new jobs because it will create new avenues that are cost-effective for launching businesses and birthing brand new enterprises.”
About the Contributor
Benjamin Glick is a student assistant at the Van Andel Global Trade Center. He has written for the Grand Valley State University student newspaper, The Lanthorn, and is double-majoring in English literature and journalism.