From Kidney Beans to Global Trade in the Duluth-Superior Port w/ Kate Ferguson

The pandemic really put a spotlight on transportation. When I was graduating from college, to be in transportation, you did your job well if the apple was always on the shelf and nobody questioned it. But the pandemic made it really obvious that we're all connected to our transportation systems, our freight, and our cargo. The Great Lakes kind of were like the Road Runner, starting to move our legs but not quite moving forward yet. But during the pandemic, we started acting as a relief valve. People noticed the West Coast was congested, the East Coast was congested, but this great waterway wasn't because we can double the use without adding additional infrastructure. Right now we could double the traffic and still have 98% reliability. That's where we really got containerized maritime cargo started. A local customer said, I have all these kidney beans and I just cannot get them off the coast. They worked with a trucking company, a container company, and us, and we worked with a vessel line, and we came up with a solution to get their kidney beans in a container to Europe through Duluth. It may not have been the most economical to start, but they had no other option. Now this year, supply chain on the coast has settled a little, we're not seeing the 70 ships off the coast of LA like during the pandemic, but that customer continues to utilize the supply chain they created through Duluth. It may not be the most economical yet, but it diversifies the risk and gives them a relief valve if transportation becomes an issue again. The more we can get those trials, showing people we can do it effectively and efficiently, the more economical it's going to become, and like you said, the bigger impact we'll have on our economy.

Right, exactly.

Yeah, right.

Yeah, I leave for Norway in a week and I'll be in Rotterdam selling the Port of Duluth Superior. The Port of Duluth Superior is a member of an organization called Highway H2O, which is the brand given to the Great Lakes St. Lawrence Seaway system, with ports, vessel companies, and facility operators all under this umbrella. We've gained some traction in the international market in the last 15 years, appearing at more shows. We have Highway H2O, a conglomeration between the U.S. and Canadian governments. We actually have somebody living in England who works for Highway H2O, spreading our message on the European side. But with constant turnover, we're constantly re-educating people about the United States and the Great Lakes. People innately know about the Mississippi River and barges, but how do they not know about the Great Lakes and vessels? It's a constant re-education process. When people hear the Great Lakes can accept vessels, they go, whoa, no way. But I've had that exact same reaction from someone in Texas. So it's not just the international market we have to educate, it's even the North American market.

We load seven million tons of coal every year, there's grain that moves out, we've automated a ship loader to make sure that iron ore doesn't land in the lake, because that wouldn't be good for a nice clean lake.

St. Louis River Quest is actually something the Duluth Port Authority has been involved with since it started.

Yeah. I think it's like saying earlier, go get your bread but you don't really think about the grain. The same thing happens with the Great Lakes. They're this boundless adventure land of clean water, and we're proud of that too. We want clean water just like everybody else. But I'm always impressed or disappointed that nobody knows about what else happens on the Great Lakes, especially the Great Lakes St. Lawrence Seaway system. If we were a little country, eight Great Lakes states and two Canadian provinces, we'd have the third largest GDP in the world.

It isn't so much talking about GDP with somebody who cares about getting their widget across the ocean. But what we try to talk about with Highway H2O is you get access to Duluth Superior, the furthest inland freshwater port in the world, plus 40 other ports along this waterway. We're trying to sell not only the Port of Duluth Superior but showing that our system as a whole has access to a vast population. Think about it, we're just spitting distance from the Twin Cities. Think about all the population around the Great Lakes. You don't have to go to an East Coast or West Coast and rail it in and truck it. You can bring a boat right into the heartland of North America and position your cargo next to those massive population areas. The transportation cost has to be more affordable with all that optionality. Hopefully leaving loaded, it's a balanced cargo in the Great Lakes.

Believe it or not, more ships come in empty than out empty. The Great Lakes St. Lawrence Seaway system's historical movement was steading grain out. Every year is a little different, depending on tariffs, political environment, monetary policy, all the things that come with global trade and pricing. Some years it's advantageous to take more of something out than bring something in. Last year we saw vessels ballasting into the Great Lakes to haul grain out of a Lake Erie port. It's very unusual for the Port of Duluth to have something ballasted in, just because we are the furthest inland seaport.

Oh, thank you. I appreciate that. Energy is important. Passion, yes.

Thank you. I do try to show my passion in a positive light. I'm very passionate about industry, and that's one reason I can keep a high level of excitement. I'm fortunate to be someone who comes to work happy every day and loves my job. When it comes down to how do you keep all those things straight, there's great networking, people out there with the same passion, which is encouraging. But I also feel like we're making a big difference, and that's why I'm so passionate. There aren't enough people focused on ports and transportation in industry and making a difference in their community. We have amazing assets here in Duluth Superior, an uncongested waterway, uncongested roadways, four Class I railroads, pipelines, air, all five modes of transportation. Being a spokesperson for that, saying how important these things are, gives me energy. Meeting people like you who support the port is great. Thank you for being a supporter, because it isn't always an easy conversation around why industry is important, why waterfront industrial property matters. Tourism is a big focus here in Duluth, rightfully so, we have a beautiful place. But we at the Port Authority believe in a vibrant community with educational and employment opportunities that include industry. All of those things give me energy and keep me going.

I love that you said that. It's so huge for the tourism industry in our community. We tell people all the time, the number one tourist attraction in Duluth, Minnesota is a vessel coming underneath the bridge. I always tell people, let's make sure there's land and industry that can support those vessels coming under the bridge. Put the motel up on top of the hill, right? Not down by the water. You can't push a thousand-footer up a hill.

Yeah, I could point to a couple of things, especially in transportation in the United States. For our agriculture friends, every state has a different weight limit on a truck. How do you cross states with a load of grain when you're allowed 100,000 pounds in North Dakota and 80,000 pounds here in Minnesota? There are things you can advocate for, let's try to have a system that works equally across all areas, because what that does is push traffic in unnatural ways. Especially in the political environment, we try to find items we can make a difference on. Let me be clear, I am not our government and political person in our office, but we try to find things we can impact. Trying to get permitting to be clear and have a timeline, a lot of us in industry can get behind that. Trying to get road restrictions changed, things we can actually impact, because there are so many things you just can't. But vote, that's what we tell people, vote.

Yeah. So we have partners, we have a working partnership. The way the Port Authority works is, in the '50s we were given a large tract of land, now called the Clure Public Marine Terminal. Within our legislation, we can either operate it ourselves or have an agent operate it for us. For the last 30-plus years, we've had Lake Superior Warehouse operating it. Together we make a brand called Duluth Cargo Connect. Even setting up that brand was a win, because it used to be we'd both attend events and hand out two different cards and people would ask, who are you? Now we operate and market under one brand. That partnership gets to celebrate these huge successes. To have containerized trade through Duluth, you need the infrastructure. We had to set up Customs and Border Protection facilities, which took dollars and negotiating. There were regulatory hurdles. We've put in over 30 million dollars in infrastructure on Port Authority property in the last six years. Major dollars, job creation. That kidney bean shipper is a win for all kinds of reasons. We spent the money on infrastructure and it's being used. We got through the regulatory process. Our terminal operator has this new customer and a great new avenue for cargo. That is more than you'd read in the paper, a big moment for the Duluth Port Authority, Duluth Cargo Connect, and Lake Superior Warehouse. We all celebrate together. But it's all driven by our mission of regional economic development. By creating new transportation alternatives, new supply chains, new optionality, we're supporting economic development, our region, our growers, ranchers, manufacturers, industry. That's why we do it. We're talking over 8,000 jobs, 1.8 billion dollars plus in economic development, and all the secondary benefits.

Right, no, yes.

Well, thank you. And thank you so much for having me, this was fun.

The Port Authority really appreciates being on. I hope somebody learned something. We're always open to hosting groups and trade teams, and even just folks that have questions. Duluthport.com.

Thank you.