On the Great Lakes, a Dry Summer Slows a Recovering Shipping Industry

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Robert Ginn / Getty Images

A cargo ship sails into Lake Michigan

Low water levels on the Mississippi River, which have snarled cargo traffic and completely halted hundreds of barges at a time, got most of the media attention during this year’s arid summer. But the weird weather is also having a severe impact on those making a living transporting goods in the Great Lakes region.

Thanks to the Drought of 2012, the Great Lakes are approaching and may fall below the lowest levels ever recorded, back in the 1960s. Lake Michigan-Huron (often recorded together by hydrologists) is about two feet below its average level, and the rest of the Great Lakes are also several inches below normal, according to the U.S. Army Corps of Engineers.

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That may not seem like much, but those inches mean a lot for shippers navigating the lakes’ canals. Glen Nekvasil of the Lake Carriers’ Association, which represents U.S.-flag vessel operators on the Lakes, says that cargos are carrying 1,200 to 1,500 fewer tons than they did a year ago.

But the problem actually started before this summer’s drought. Nekvasil says that in the 1990s, carriers could sail with as much as 71,000 tons of cargo. But this summer, the maximum load of coal had fallen to around 64,700 tons. That’s because in areas like the Straits of Mackinac, which connect Lakes Michigan and Huron, water levels have gotten so low that they can’t support larger cargos anymore.

The problem is partly cyclical. The 1960s witnessed some of the lowest rainfalls in the region’s history, forcing carriers to take on less cargo. By the ‘90s, however, rainfall had peaked, allowing more cargo to safely navigate the Lakes. When the drought hit this summer, the lakes were already well below 1990s levels. The low rainfall over the past several months has just accelerated the problem.

Meanwhile, the region’s shipping industry is facing other challenges. Nekvasil says that among the “big three” commodities shipped along the Lakes – iron ore, coal and limestone – only iron has bounced back since the recession. In 2006, 172 million tons of dry-bulk commodities – which also include salt, cement and grain – were transported on the Great Lakes. Cargos hit a low in 2009 at 112 million and have yet to rebound fully. Last year, only 142 million tons were transported along the Lakes.

“The coal trade is down because Canada is phasing out coal to be used for energy, and limestone is down primarily because the construction industry is still hurting,” says Nekvasil.

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But will the effects of the drought trickle down to consumer prices? Much of the iron ore and some of the coal shipped on the Lakes eventually ends up at mills in northern Indiana and Michigan that provide steel to the Big Three automakers in Detroit. Transportation consultant James Roach, who is based in East Lansing, Mich., says while a number of factors go into the price of vehicles, it’s possible that the higher costs of transport on the Great Lakes could make their way to car buyers in the form of higher prices.

The drought has also hurt Michigan’s farmers, many of whom have had to apply to the state to dig wells for irrigation. According to Jon Bartholic of Michigan State University’s Institute of Water Research, 500 new wells were registered this year alone. Only 400 were registered in 2011 and 250 in 2010. Michigan, more specifically Constantine, Mich., has been called the “seed corn capital of the world,” and many farmers are increasingly relying on new water sources to irrigate their corn, as well as soybeans, as the region’s long-term water levels show no signs of improving.

But not everyone’s complaining about the weird weather. The drought has actually helped Michigan’s wine-producing region. According to the Great Lakes Echo, farmers and wine sellers are seeing a much-improved grape yield this year, which could lead to overall growth in the industry. And Travel Michigan, the state’s tourism office, is reporting the best summer tourism numbers in the last eight years.

“From what we’re hearing anecdotally, we’ve had a great year,” says Travel Michigan spokesperson Michelle Begnoche. “If anything, the heat has actually driven people to the beach.”