Business falls, troubled waters rise for St. Lawrence Seaway

The St. Lawrence Seaway is too shallow, its locks too narrow, and its tolls too high. Those are just some of the reasons shippers say the inland waterway is in decline. The Seaway is a joint American-Canadian project opened by Queen Elizabeth II and President Eisenhower in June 1959. Its series of locks, canals, and deepened channels allows ships to get past the rapids at Montreal, shallow water elsewhere in the river, and the 326-foot drop of Niagara Falls. Ports from Chicago to Toronto are open to oceangoing ships and large lake vessels. But after 28 years, the Seaway has its problems.

Take tolls, for instance. Early this summer the United States started to rebate tolls charged to shippers. The US Congress passed legislation last year to eliminate the tolls, but because of an agreement with Canada it still has to collect them. To get around that rule it sends rebate checks to shippers. The logic is that having no tolls means more business.

The Canadian side has responded to reduced traffic by boosting the charges to make sure the Seaway breaks even. ``Our mandate is very clear,'' says Gaetane Hemsley of the St. Lawrence Seaway Authority in Ottawa. ``The Seaway has to support itself financially, and that means tolls.''

``Business has been declining, and the solution has been to raise tolls,'' replies Angus Laidlaw of the Dominion Marine Association. The association represents 15 shipowners who operate 131 ships on the Seaway, 100 of them the bulk carriers custom built to squeeze into the Seaway locks. These ships can be no longer than 730 feet and no wider than 75 feet.

Lakers are built to carry bulk cargos such as iron ore and grain. It costs C$23,000 ($17,480) in tolls on the Canadian locks to get a load of grain from Thunder Bay on Lake Superior to the ocean port of Port Cartier. To take a load of iron ore back through the same system would cost C$31,000. Different commodities are charged at different rates.

As tolls rise, traffic has been dropping. In 1986 the Seaway handled 48.6 metric tons of cargo, down from 64.6 million metric tons in 1981 and the record of 66.2 million metric tons in 1979. There are other reasons for the decline, however, Mr. Laidlaw says.

A lot of Canadian grain traffic is now going to the Pacific, especially the new grain terminal at Prince Rupert, north of Vancouver.

Grain wars and subsidies to North American and European farmers have meant lower grain sales.

Barges on the Mississippi River have been cutting rates, competing with the Seaway.

Deregulation of railways in the US has made rail shipment more competitive. Deregulation is coming to Canada, too.

Iron ore movements are down because of the decline of the US steel industry. A voyage for a Seaway vessel used to take grain from Lake Superior to the Gulf of St. Lawrence, then bring back a load of iron ore from northern Quebec. Today, those ships sometimes return empty.

The volume of construction material, such as cement, sand and gravel, and gypsum shipped on the Great Lakes and the Seaway has also declined.

The locks on the Seaway are too short and narrow for big oceangoing vessels. ``The cost of doing business is more expensive, and we can't increase the size of our ships,'' says Frank Nicol, head of the Shipping Federation of Canada, which represents the oceangoing users of the Seaway. Mr. Nicol wants tolls reduced or eliminated and the Seaway's locks enlarged.

``Canada's contribution has to be the abolition of tolls,'' Nicol says. It doesn't matter if the Seaway makes money, he adds. ``The country as a whole benefits from the Seaway.''

Booming economies on both the American and Canadian shore have pushed up traffic on the Seaway 10.6 percent so far this year. That won't break any records, and a threatened strike could put an early end to this season. Lock workers have voted in favor of a strike and could be out by mid-October. The Seaway doesn't usually freeze up until December, but this year it could happen sooner.