Aged Great Lakes lock could cripple US steel industry and hit manufacturing jobs

Most of the iron ore used to feed America’s hunger for steel passes through the 50-year-old Soo Locks in Michigan. A failure could put millions of jobs at risk

Between Lake Superior and the Great Lakes of North America lies a narrow canal, just 1.6 miles long. Each year some 10,000 ships pass through the Soo Locks of St Marys Fall canal, nearly all the iron ore used in the US passes through and millions of American jobs depend on them staying open. But age and neglect could soon put those jobs under threat.

Consider a day in the life of the average American. It’s an existence that rides upon a figurative highway of steel – steel appliances, steel cutlery and tools and, most important to the US economy, steel-bodied automobiles. That’s a lot of steel, and most of the ore it’s made of comes from mines in Minnesota and northern Michigan.

Now the transportation network that connects manufacturers with the raw materials they need may be hanging by a thread, suggests a Department of Homeland Security report unearthed by the Detroit Free Press. The report focuses on the economic impacts of a shutdown of the nearly 50-year-old Poe Lock – a vital waterway transportation link for huge cargo ships that carry raw materials and supplies back and forth across the Great Lakes – and says that a six-month closure of the lock could cost America 11 million jobs, crippling automakers and other manufacturers in the process.

“The Soo Locks represent a critical link in the steel supply chain, giving them a disproportionate influence on vehicle manufacturing and the entire steel industry,” Karl Brauer, an analyst at Kelley Blue Book, an automotive industry research firm, said.

More than half of America’s locks are over 50 years old, according to the American Society of Civil Engineers, which estimates some $3.6tn is needed to repair the US’s antiquated waterways.

Few locks are more vital than Poe Lock, the largest among the four US army corps of engineers-operated Soo Locks, which connect Lake Superior to the lower Great Lakes. The water level in Lake Superior is more than 20ft higher than Lake Huron, and requires the use of locks to move ships from one lake to the other without having to encounter a treacherous mile of rapids between the two. At 1,200ft long, 100ft wide and 32ft deep, Poe is the only lock along that section of the St Marys river that can accommodate the dozen massive lake freighters that can each carry nearly 70,000 tons of iron ore from mine to mill.

“The Soo Locks are over 50 years old and are starting to show their age, but our crews work hard to keep them as reliable as possible,” Emily Schaefer, a spokeswoman for the Detroit district of the army corps of engineers, said in an interview. “At this time, a Poe Lock replacement is yet to be determined, but is likely several years away.”

“Soo Locks typically experience several outages each year, which are generally short and coordinated closely with the shipping industry to minimize impacts, but last year we did have a 19-day outage of the MacArthur Lock,” she said.

Michigan legislators have been pushing for the federal government to replace the lock, but so far, the best that’s come through is a tentative cost-benefit study.

Congress authorized a new Poe-sized lock in 1986, but when work finally began in 2009, the cost estimate for the project had risen to $580m. Funding never materialized. US coast guard data shows that, on average, the Soo Locks suffered about 3,000 hours of service interruptions between 2009 and 2014. That’s not to say they have been unreliable, but among other lock systems, including ones on the Mississippi, Ohio and Tennessee rivers, Soo Locks top the list for delays.

“Our crews strive to have no significant service disruptions during the operating season,” Shaefer said.

Unfortunately, there is no duplicate for the Poe Lock, and when the Soo Locks have to be shut down for repairs – as they were was last year during peak shipping season – big delays can result.

Moving steel production elsewhere isn’t an option. A smattering of steel mills in other parts of the US and Canada would be unable to keep up with manufacturers’ demand for steel. Importing steel would be expensive.

According to the US Geological Survey, America produces and uses about 2.5% of the world’s iron ore. Nearly all of the ore used in American manufacturing comes from mines in Minnesota and Michigan. Lake freighters, with their large capacity, are the most efficient way to transport the more than 50m metric tons of ore American iron mines produce each year.

A look at BNSF Railway’s website shows that a standard ore hopper train car has a 100-tonne capacity. A tractor trailer can only carry about 20 tonnes. Each lake freighter is equivalent to 700 train cars or 3,500 trucks. That would make for an eight-mile-long train (the longest in history was an iron ore train in Australia that was 4.5 miles long) or enough trucks to cover nearly 40 miles of road. Considering the fact that it takes well over 700 lake freighter loads to move American iron ore production each year, it’s not surprising that over the decades, ships have been the favored method for transporting large quantities of raw material.

The Department of Homeland Security estimated in its report that closure of Poe Lock for just a few weeks could hamstring most of the nation’s steel production. The army corps of engineers estimated in a report last year that in the absence of the Poe Lock and the fleet of heavy freighters, only 35% of the ore produced in northern mines could be transported using smaller vessels, trucks and rail.

“The most disturbing aspect of the lock’s ageing infrastructure is a complete lack of alternative methods to move this volume of steel,” Brauer said. “All indications suggest that a failure of these locks will drastically curtail US manufacturing for years.”