Currents of opportunity

Untapped potential at the Port of Green Bay could expand potential for regional manufacturers

Posted on Nov 15, 2016 :: Cover Story
Posted by , Insight on Manufacturing Staff Writer

Somehow, we always find a way back to the water.

As Dean Haen ponders the future of the three-mile stretch of water that makes up the Port of Green Bay, it’s not hard to see the day is coming soon when manufacturers in Northeast Wisconsin discover the business potential the port offers.

He will be waiting, with open arms.

“Interest in using the water for transport will grow,” says Haen, director of the Port of Green Bay and Resource Recovery for Brown County. “You can’t just keep making the highways wider, and as the rail bottleneck grows in Chicago, we will see people return to the water.”

His task now is to make sure the port is ready when those manufacturers shift their gaze to the opportunities the port offers.

“We have the capacity to grow, perhaps as much as 60 percent,” Haen says. “The water can be the solution.”

Not that the port is idle now by any means. In fact, it’s quite a thriving concern.

The Port of Green Bay sees an average of more than 200 ships pass through each year, moving more than 2 million tons of coal, limestone, cement, salt, pig iron, fuel oil, forest products, liquid asphalt and many other bulk commodities valued at more than $300 million.

More than 700 jobs can be linked to port operations sustaining more than $27 million in personal income, and the annual economic impact on the Green Bay area is estimated between $75 million and $100 million each year.

The 14 port-related businesses operating at the port pay more than $5 million in local and state taxes.

“Having our own slip is certainly one of the many things we have here that help make us competitive,” says Mike Kawleski, public affairs manager for Georgia-Pacific, which has operated in Green Bay for more than 100 years. “We use it to bring in coal for the boilers, and perhaps the most notable thing we had delivered was our new gas boiler, which we couldn’t have delivered any other way.”

Untapped Opportunities

For all that activity, there are plenty of opportunities for expansion, particularly for manufacturers looking for expanded opportunities to produce and deliver new products to customers.

Perhaps the most obvious of opportunities is shipping finished goods, either to markets in the United States or internationally. As the westernmost port on the Great Lakes, the Port of Green Bay ties into an immense, global network. On its own, the Great Lakes region — which includes ports in Canada as well as the United States —  comprises the third largest economy in the world. The Great Lakes also connect to the ports of the eastern U.S. and worldwide markets.

Indeed, exports were once the principal driver at the Port of Green Bay.

In the mid-1800s, principal exports from Green Bay were lumber, barrels, shingles, railroad ties and other forest products. In the late 1800s, agricultural products were king, and Green Bay was known as the largest flour exporting port on the Great Lakes.

Tides shifted in the mid-1930s and business at the port changed from exporting to importing with the arrival of coal and petroleum coke. Today, the port continues to predominately import dry and liquid bulk commodities for Northeast Wisconsin’s manufacturing businesses.

“The Port of Green Bay is the lifeblood of our supply chain,” says Holly Bellmund, president and COO of GLC Minerals, which crushes calcium carbonate for a variety of industrial uses. “Lake vessels allow for thousands of tons of material to be moved at a time. A truck holds about 25 tons of material and a rail car holds about 100 tons. Using trucks and railcars in place of the boats would be cost prohibitive for our marketplace.”

By Sea

Growing outbound opportunities would create additional value and opportunities, Haen says.

But there are challenges.

The first of which, there are no container ships working the Great Lakes, the preferred method of shipping finished goods to market, as containers can be moved from truck to rail to ship and in reverse, making the logistics more efficient. Because of the region’s history, ships working the Great Lakes are designed for bulk transport of raw materials and commodities.

“Right now, it’s bulk dry and liquid commodities,” Haen says. “But if we can get containers on the lakes, we can compete.”

It’s not a question of facilities.

The Port of Green Bay is well served by both rail lines and trucking companies that can provide overnight delivery within 400 miles. Wisconsin Central once operated an intermodal transfer facility — including containers — that could be revived and re-equipped should conditions merit. A 2013 economic study found demand for 80,000 container lifts annually. 

Another challenge the port faces for increasing exports are the current federal maritime policies that tax goods every time they enter or leave a new port. That adds expense, preventing a container service that would travel from port to port, making the only alternative the ability to fill an entire ship with cargo in Green Bay headed for a single port of destination – an unlikely scenario right now.

“This is one where I would hope our manufacturers would lead the fight,” Haen says. Changes have been passed by both the House and Senate at various times but have never survived into the final legislation.

Still, efforts to introduce such a service are underway. There is an effort to create a container service to Europe from Cleveland, that Haen is carefully watching to see if it could translate into opportunities for Northeast Wisconsin. He is also actively involved in efforts to update the maritime laws covering the Great Lakes to facilitate container shipping.

By Land

But businesses in Northeast Wisconsin don’t need the water to realize opportunities at the port.

A powerful tool the port can use to spur economic development is its Foreign Trade Zone status, established in 1990, which allows businesses to delay and potentially reduce duties paid on finished goods or components until the products leave the zone. The law applies whether it’s storage, processing or manufacturing.

The port also can establish subzones not at the port facilities, allowing it to extend its reach to other locations, which it has done for manufacturers in Brown and Winnebago counties, but also stretching across the state to Sheboygan, Marinette and even Hudson.

“Rather than paying those duties up front, the trade zone can improve cash flow when a company has a large inventory it needs to handle,” Haen says. “They can use that money elsewhere.”

In addition to the trade zone status, the port is also working to secure — by ownership or long-term lease — developable parcels of land within the port area. There are several sites within the port that are no longer used by companies with a need for port service, as well as a few vacant sites within the port, or nearby, that could be attractive sites for manufacturers if the right terms can be reached, Haen says.

Steaming ahead

In the end, it all comes back to demand.

As fuel costs continue to increase and congestion in the nation’s rail hubs shows no signs of abating, Haen is confident the advantages of waterborne shipping will once again catch the attention of manufacturers, particularly if container services can be added.

The economics are favorable. When compared to truck or rail, moving cargo by ship is the most cost-effective mode of transportation per ton mile, quietly moving cargo farther, more efficiently and safer.

For example, a ship destined for the Port of Green Bay carrying 18,000 tons of coal from Sandusky, Ohio, will burn 7,000 gallons of fuel. That same amount of coal delivered to Green Bay by rail takes almost 200 rail cars burning 36,000 gallons of fuel. By truck it requires 700 trailers burning more than 110,000 gallons of fuel.

Ships also reduce pollution from emissions. Moving that same cargo of coal from Sandusky to Green Bay by rail or truck results in 11 and 16 tons of emissions respectively. Transporting by ship results in one ton of emissions.

But there is one significant drawback: time. It takes longer — depending on highway and rail congestion — to move goods by ship. Still, Haen sees opportunities ahead.

“We just can’t stop grinding away,” he says. “If we can get some of these things fixed, that’s going to mean new opportunities, including the building of new ships. We can do that right here.”