SYLVIE DOUGLIS, BYLINE: NPR.
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DARIAN WOODS, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Darian Woods. And we are joined today by Dustin Dwyer from Michigan Radio.
DUSTIN DWYER, BYLINE: Hey, Darian.
WOODS: Good to have you.
DWYER: It's great to be here. So I wanted to come on to tell you about this journey I heard about.
DWYER: And I brought a globe with me.
WOODS: I love it.
DWYER: All right. So we start at Shanghai, China.
WOODS: Yep, right on the coast.
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DWYER: You're going to go all the way across the Pacific Ocean on your little imaginary cargo ship.
DWYER: And you're going to head like you're going to go to Los Angeles. But as you know, the Port of Los Angeles is backed up. So...
WOODS: OK, we've got to find an alternative port to go to.
DWYER: Alternative route - so go south. And you know where the Panama Canal is.
WOODS: Oh, yeah.
DWYER: So you're going to take that. Once you get through that, you're going to head up the East Coast. But don't stop. Go past Miami, past Savannah, past Baltimore. Go even past Boston until you get to Nova Scotia.
WOODS: Right. All the way to Canada, yep.
DWYER: OK, so then hang a left there. And you see that little waterway, the St. Lawrence Seaway, which heads to Montreal?
DWYER: You're going to take that.
WOODS: OK. We're getting into some pretty narrow territory.
DWYER: Keep going past Montreal. You're going to come into Lake Ontario. You're going to see Toronto. Hey, Toronto. You know Niagara Falls?
WOODS: I know of it. Yeah.
DWYER: You're not going to go over Niagara Falls. You can't actually go up it.
WOODS: (Laughter) Oh, right.
DWYER: So instead, there's another canal.
WOODS: Yeah, I would imagine so.
DWYER: So then take your boat into Lake Erie. And here I should tell you, this journey, this long journey, is the journey of the Happy Rover. It's a container ship that I found out about. It took this trip back in November.
WOODS: All right, so not your typical journey. And you're saying that the Happy Rover took this journey to avoid the mayhem at the West Coast ports.
DWYER: Exactly. And I was there on the shores of Lake Erie waiting for the Happy Rover with a guy named Claus Sorensen. He works for a shipping company called Spliethoff.
Is this us out here?
CLAUS SORENSEN: Yep, that's her.
DWYER: That's her.
WOODS: Today on the show, Cleveland docks - how the journey of the Happy Rover shows how the Great Lakes could act as a relief valve for the next global shipping crisis.
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DWYER: Seagulls like it. Seagulls are excited.
WOODS: We are standing in Cleveland.
DWYER: Cleveland in November, which is freezing - and I am standing out on the dock in the wind. Right downtown - this is right next to where the Browns play, not far from the Rock and Roll Hall of Fame. This is the Port of Cleveland. I'm standing there with Claus Sorensen, and the Happy Rover is finally pulling in. It's backing into the dock. On the deck of the ship are these maroon shipping containers that they have to unload.
You got one.
SORENSEN: Got one.
DWYER: Only took them 40 days.
DWYER: So, Darian, standing right next to it, I have to say this ship, the Happy Rover, looks plenty huge to me. It's, like, bigger than a football field.
DWYER: But, like, still compared to, like, one of those huge ocean container ships, it's, like, nothing.
WOODS: And the reason it's so small is because it's got to go through all those canals in the Great Lakes. These canals were built before the wave of containerization took off in the 1960s, i.e. putting things into containers and standardizing them with these big metal boxes. When you did that, products could be loaded and unloaded more quickly at the ports, and ships could be built to carry more and more containers. So all around the world, container ships were getting bigger and bigger. But the canals in the Great Lakes - they were the same size. So even though the Great Lakes does, you know, a lot of shipping, the idea of containerization with these standardized containers with their massive economies of scale - that just skipped over the Great Lakes.
DWYER: Until now, Claus says.
SORENSEN: If rates are low, it makes no sense. If rates are high, then you can find a way for it to make sense. Rates are high right now because of the backlog and the bottlenecks and what have you, especially on the West Coast.
WOODS: And so with that extra financial incentive, you get the journey of the Happy Rover ship all the way from Shanghai to Cleveland.
DWYER: But even that journey was a long time in the making for the Port of Cleveland and for Claus' company, Spliethoff. They basically made a bet on this years ago, before anyone knew that there was a crisis coming in shipping because you can't just make a phone call and all of a sudden, this port that wasn't taking containers before now can take containers. There are regulations, and one of the biggest is that the Department of Homeland Security - they have to be able to scan every single container that comes into the port. And buying a scanner - that's not a cheap proposition. We're talking, like, hundreds of thousands of dollars. So if you're operating a port and you think, well, I'm not probably going to make that much money off of this container business, why buy the scanner anyway? Why invest?
WOODS: But Cleveland did, and now other ports in the Great Lakes are following that lead.
DEB DELUCA: The Great Lakes St. Lawrence Seaway system is an underutilized asset. I do think it's capable of being used as a relief valve for these global supply chain pressures.
WOODS: This is Deb DeLuca. She leads the port of Duluth, which is the largest port on the Great Lakes. It's also the farthest inland. It's more than 2,000 miles from the ocean. And she says it's mostly raw materials moving through Duluth's port right now, like grain, fertilizer and the biggest one - iron ore.
DWYER: Deb says those things are really the heart of Great Lakes shipping today, and they will be for a long time to come. But she says there is room for container shipments to grow. So as of this year, Duluth became the second Great Lakes port after Cleveland to be able to accept container shipments.
DELUCA: You know, it's always a balance of service and price, correct? And I do think that the costs can work.
WOODS: OK, so, Dustin, just a bit of a reality check. I mean, we're not expecting the Great Lakes shipping routes to replace the ones to LA and Long Beach, are we?
DWYER: No. OK, fine, fine.
DWYER: Even in the wildest dreams of Great Lakes enthusiasts like myself, these ports could only handle a tiny fraction of what even the East Coast ports can. But there's still a real opportunity here, and it's not necessarily for these shipments that would take the long way from China, like the Happy Rover. Consider shipments from Europe. This year, Claus' company Spliethoff had the Great Lakes' first dedicated regularly scheduled container ship route, and it ran from Antwerp, Belgium, to Cleveland.
SORENSEN: I mean, we're still getting calls today. How are you doing this? How does it get in here? Well, you know, we have to have a geography lesson.
WOODS: Luckily, I had one at the start of the show.
DWYER: (Laughter) Yeah, so get that map back out. But this time...
WOODS: All right, yep.
DWYER: Come from Belgium, and trace that route. And Cleveland is actually not that much farther than any of the other East Coast ports.
SORENSEN: From Antwerp to Baltimore, Antwerp to Cleveland, the distance is within a hundred miles. People are astounded to hear this fact. So, yeah, the distance actually is very close to being the same.
DWYER: So if things are backed up at those East Coast ports, it can actually make more sense to ship to Cleveland. And so much so that this year, Claus says they had containers arriving on boats coming into Cleveland that were then loaded up on trucks or trains or whatever and sent back over land back to the east coast. And next year, maybe other Great Lakes ports will join them, like Duluth. There is a lot of potential here. There's about a trillion dollars in annual trade between the U.S. and the EU, with hundreds of thousands of containers arriving on the Atlantic coast every year, so some of that could go to the Great Lakes.
WOODS: For some of the year, right? I mean, there is the polar bear in the room - winter.
DWYER: Right, which I've been skillfully ignoring this whole time, Darian.
WOODS: That's right, so there is a lot of ice in winter, and these shipping lanes are actually closed every winter for months.
DWYER: Which is, I'll admit, a minor inconvenience.
WOODS: It might be.
DWYER: But Claus tells his customers, plan in advance. Try to ship more than you think you need early in the season. But, yeah, it's an issue.
WOODS: OK, so it's not as if Cleveland's going to suddenly disrupt the entire way that global shipping operates. This won't be, say, bigger than Baltimore.
DWYER: Fine, fine. OK, so...
WOODS: Sorry to rain on your parade.
DWYER: I'll back off on my Great Lakes enthusiasm just a bit. But look. It could be a big deal for Cleveland and for Duluth and for people really anywhere in the middle of the country who want to get their shipments in quicker. So maybe the next time a global supply chain crisis hits, the Great Lakes will be here to relieve some of the pressure.
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WOODS: This episode was produced by Brittany Cronin with help from my Isaac Rodrigues. It was fact-checked by Corey Bridges. Our senior producer is Viet Le, and our editor is Kate Concannon. THE INDICATOR is a production of NPR.
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