Maritime Logistics Professional

A new study commissioned by the U.S. Treasury Department lists modernization of the locks at Sault Ste. Marie, Mich., as one of the 40 American transportation and water “megaprojects” that could bring as much as $1.3 trillion in national economic benefits. The system resiliency that a second Poe-sized lock will provide has an estimated net economic benefit of as much as $1.7 billion, according to the study.

 

The Soo Locks connect Lake Superior to the lower four Great Lakes and St. Lawrence Seaway. Lake Superior is home to five iron ore loading ports, as well as the largest coal and grain shipping ports. Without the locks at Sault Ste. Marie, those cargos could not reach steelmakers, utilities and overseas markets.

 

As the study notes, more than 60 percent of the current U.S. and Canadian fleet is restricted by size to the Poe Lock. Any type of service disruption or closure would result in vessel delays, and outages of the aging Poe Lock (it was built in 1969) are expected to increase.

 

The study further notes that in the event of a closure, there may not be viable alternatives to transporting the more than 40 million tons of iron ore and coal to U.S. manufacturers along the Great Lakes. In fact, a 2016 Department of Homeland Security report on a six-month closure of the Poe Lock forecast 11 million jobs lost nationally as steel production and manufacturing quickly grind to a virtual halt.

 

Construction of a second Poe-sized lock was authorized in the Water Resources Development Act of 1986, but an inaccurate analysis of the benefit/cost (b/c) ratio has stalled the project. The Treasury Department study puts the project’s b/c ratio between 2.0 and 4.0, well above the level required for inclusion in an Administration budget and notes that the Federal guidance followed by the U.S. Army Corps of Engineers in determining the current b/c ratio does not fully capture impacts to the nation for each closure of the Poe Lock.

 

“This new study is further proof that a second Poe-sized lock will be a wise investment, said James H.I. Weakley, President of Lake Carriers’ Association, the trade association representing U.S.-flag vessel operators on the Great Lakes. “The project is shovel ready. We just need an accurate b/c ratio.” 

 

Weakley further noted a second Poe-sized lock fits perfectly in President-elect Trump’s plan to invest in infrastructure. “The project will require 1.5 million labor-hours over the 10-year construction period. The jobs it will create have been likened to opening an auto plant in the Upper Peninsula. And the economic benefit will exceed $1.7 billion.”