Midwest leaders want boost for Great Lakes shipping

An increasing number of government leaders in the Midwest argue that the nation's "fourth seacoast" -- the Great Lakes and St. Lawrence Seaway -- has been all but forgotten in federal shipping and financial policies.

In their discussion of Great Lakes shipping prospects, Midwest governors gathered here for their annual conference hope to agree on a water transportation strategy which will prod Washington to treat the Midwest more equitably.

The governors discussed the issue in the broader context of the potential for economic development of their regions' water resources.

"Water is the Midwest ace in the hole," noted Michigan Governor William Milliken. "No single substance will be more crucial for the future economic well-being of the Midwest."

Gov. Lee Dreyfus of Wisconsin, who suggested that a severance tax might someday need to be put on water resources to preserve them from diversion to other parts of the country, described the region's water potential as one of its uptapped strengths.

What is fueling this determination to focus Washington's attention on the transportation problem is the severe economic slump that has hit Great Lakes shipping. Many regard the slump as a key factor in the region's overall economic doldrums.

Only 20 years ago some 60 ocean-going ships regularly called at Great Lakes ports. This year only one line -- the American-owned Lykes Brothers Steamship Company -- makes regular rounds. The reasons range all the way from the shorter season prevailing on the Seaway and Great Lakes -- currently about eight-and-one-half months -- and the limited size of vessels able to pass through the locks to Seaway tolls and the lack of regular shipping schedules on the Great Lakes.

"It's a chicken and egg situation," observes Frank Kudrna, head of the Illinois Department of Transportation's Water Resources Division. A reliable shipping schedule encourages producers to put cargo aboard, he says, but shippers don't want to guarantee regular service until they are sure of some business.

Though a large percentage of agriculture and military cargo headed overseas originates in the Midwest, it is often transported by rail or truck to the East Coast for overseas shipping. Shippers argue that the Atlantic Coast has a greater variety of vessels heading for foreign ports on a regular schedule.

"We think there's great potential for using the [Great] Lakes for economic purposes," notes Jim Kellogg, deputy director of the Department of Transportation of Michigan, the state which is the key organizer of the current move. "But the Midwestern states haven't worked that closely together on it -- it's been a somewhat neglected area."

One proposal of the Reagan administration that particularly concerns the Midwest governors is the bid to charge user fees in order to recover the federal dollars required to operate and maintain inland waterways. The governors want to be sure that if there is such a charge, it is uniformly applied -- preferably based on tonnage. They reason that a charge on tonnage rather than on the size of the vessel or the number of port stops would put Great Lakes shipping at the least disadvantage.

The governors also propose that the remaining construction debt on the 22 -year-old St. Lawrence Seaway be forgiven by Washington. Tolls collected from the start have paid ab out one-fifth of the cost. The governors believe tolls discourage use of the Lakes.

Rep. James L. Oberstar (D) of Minnesota, co-chairman of the Northeast-Midwest Congressional Coalition, which strongly supports that proposal, has a bill pending on Capitol Hill to erase the construction debt on the Seaway. His bill would, however, charge waterway users enough to cover operating costs.

One proposal widely supported in the Midwest -- but spurned in Washington at the moment -- would ensure that at least 10 percent of all federal exports from military goods to grain be shipped through the Great Lakes.

While former commerce secretary Philip Klutznick endorsed the idea last December, it was never implemented. The Maritime Administration has recently rejected it on a variety of grounds. But the geographic quota could be reconsidered since the maritime agency is being shifted from Commerce to the Department of Transportation. Prospects are still seen as slim, however.

In the meantime Sen. Charles Percy (R) of Illinois, who has been pressing for greater federal support for Great Lakes shipping, is backing an interim proposal that could help. He suggests that for the "fourth seacoast" the usual federal requirement that at least half the cargo travel in US-owned ships be relaxed. His reasoning is that foreign-owned vessels can sometimes do the trip more cheaply. The Senate merchant marine subcommittee has promised to carefully consider the idea.

Although there is ample talk from a variety of corners about the economic benefits of extending the Great Lakes shipping season, Midwest officials are not pushing it. A recent Army Corps of Engineers study on winter navigation recommended that the season be extended by about two months, but environmental concerns about the effects of ice removal on shorelines and concerns about the financial costs have so far have made the issue a lower priority. The Midwestern governors will propose a minor recommendation: rather than the usual announcement of a fixed season in advance, dates would be dictated by weather and other conditions.

One thing is sure: Washington will hear more on the subject from Midwest governmental leaders. As Dr. Kudrna says: "If some of the problems now on the horizon increase -- like the cost of tolls, the user charges, and the lack of federal cargo -- the already limited shipping on the Great Lakes could go down to zero."

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