Northern Economist 2.0

Monday, 24 July 2017

Port Activity in Thunder Bay: A Retrospective

Thunder Bay's economic development hinged on its role as a transportation hub and its port was integral to that.  From the early days of the grain trade to the development of the massive elevators that still mark its waterfront, Thunder Bay was vital to the development of the Canadian wheat economy.  At its peak, over thirty grain elevators lined the waterfront in Thunder Bay and it was the largest grain port in the world.  Thunder Bay's port underwent a decline in the 1980s as a result of shifts in global grain markets that persisted  into the early 21st century but recent years have seen a resurgence of both the grain trade and the port.  Indeed, there is new life in the entire St. Lawrence Seaway as a recent piece in the Globe and Mail noted that 2017 has seen a 20 percent increase in freight movement driven by iron ore and grain shipping.

The Port of Thunder Bay maintains a nice set of current and historical statistics on its shipping activity and their data provides some optimism for the future as total tonnes shipped have been trending upwards since 2010 (See Figure 1).

Indeed, the cumulative totals as of June 30th, 2017 are up 21 percent over the same period last year.  The number of vessels at the port has also grown from 368 in 2010 to reach 403 in 2016.  Along with grain, the port also ships dry and liquid bulk, potash and general cargo and there have been marked increases in general cargo, dry bulk and potash since 2010.  With changes to the the system of grain marketing, proposed changes to the rules governing grain transportation by rail and the Port of Churchill out of commission, activity can be expected to pick up in Thunder Bay.

Of course, the recent uptick does not yet reverse the long term decline as Figure 2 illustrates. Figure 3 shows that the decline was primarily drven by the drop in grain shipments but the demise of coal-fired generation and iron ore in Atikokan were also factors in the decline.  Nevertheless, as Figure 4 illustrates it is grain shipping that has always been the bread and butter of the port and despite its decline, its share of cargo has grown from about 60 percent in the 1950s and is over 80 percent today.

The number of vessels also dropped over time (See Figure 5) but what is interesting is that Great Lakes shipping has become more efficient with larger vessels over time.  As Figure 6 shows, while the total tonnage shipped through the Port of Thunder Bay declined after the 1980s, the tonnage per vessel has increased pretty steadily.

A more efficient port and rising demand bodes well for the future of the port as well as the economy of Thunder Bay.  It is also a testament as to how despite all the economic changes that have occurred, it remains that an activity whose infrastructure was laid in the late nineteenth and early twentieth centuries and is still important to Thunder Bay's economy.