Port Congestion and the Great Lakes-St. Lawrence Seaway: What Shippers Need to Know

When most people think about port congestion, they think about the massive container terminals on the West Coast — the Port of Vancouver, the Port of Prince Rupert, or the sprawling facilities at Los Angeles and Long Beach. These are the ports that make headlines when container ships queue offshore and supply chains seize up.

But for shippers in Ontario and Quebec, the more relevant congestion story is closer to home. The Great Lakes-St. Lawrence Seaway system — the 3,700-kilometre network of lakes, rivers, canals, and locks that connects the Atlantic Ocean to the heart of the continent — is experiencing a period of significant operational stress. Congestion at key nodes in this system is creating delays that ripple far inland, affecting freight programs that many shippers do not immediately associate with port operations.

Understanding the dynamics of this system, the current sources of congestion, and the options available to shippers is increasingly important for anyone managing freight in Central Canada.

The Great Lakes-St. Lawrence Seaway is one of the most remarkable engineering achievements in North American history. The system allows ocean-going vessels to travel from the Atlantic to ports in Thunder Bay, Ontario — more than 3,700 kilometres inland — and serves as the primary marine gateway for bulk commodities including grain, iron ore, coal, and potash.

The system handles approximately 40 million tonnes of cargo annually, supporting industries across the Canadian and American heartland. The Port of Hamilton, the Port of Toronto, the Port of Montreal, and dozens of smaller ports along the system collectively handle a significant share of Canada's import and export freight.

The Seaway operates seasonally — typically from late March to late December — with the winter closure driven by ice conditions on the St. Lawrence River and the upper lakes. This seasonal constraint creates a natural rhythm of congestion: the opening of the season in spring and the rush to complete shipments before the winter closure in late fall are predictably the most congested periods.

Several factors are contributing to elevated congestion levels in the current operating environment.

Infrastructure age is a fundamental challenge. The Seaway was built in the 1950s and opened in 1959. While it has been maintained and upgraded over the decades, the core infrastructure — the locks, the channels, the terminals — was designed for a different era of shipping. The locks, in particular, limit the size of vessels that can transit the system. The maximum vessel size that can navigate the Seaway is significantly smaller than the vessels that call at major ocean ports, which means that cargo moving through the Seaway must be transshipped to smaller vessels, adding time and cost.

Labour disruptions have been a recurring source of congestion at Canadian ports. The Port of Montreal has experienced several significant labour disputes in recent years, including work stoppages that have diverted cargo to other ports and created backlogs that took months to clear. The uncertainty created by ongoing labour negotiations has led some shippers to build contingency plans around alternative routing, which itself creates demand spikes at alternative facilities.

Climate-related disruptions are an emerging factor. Low water levels on the Great Lakes, driven by changing precipitation patterns and increased evaporation, have periodically forced vessels to reduce their cargo loads to maintain safe draft clearances. When vessels carry less cargo per trip, more trips are required to move the same volume of freight, increasing congestion at terminals and in the navigation channels.

Drayage capacity constraints at inland ports mirror the driver shortage challenges discussed elsewhere. The trucks that move containers between port terminals and distribution centres — drayage operations — are subject to the same driver shortage pressures as the broader trucking market. When drayage capacity is tight, containers sit at terminals longer, reducing the throughput capacity of the terminal and creating congestion that backs up the entire system.

Increased import volumes have strained terminal capacity at several Great Lakes ports. The growth of e-commerce and the reshoring of some manufacturing activity to North America have increased the volume of containerized imports moving through the Seaway system, and terminal infrastructure has not always kept pace with that growth.

Port congestion does not stay at the port. It propagates through the supply chain in ways that affect shippers who may never interact directly with a port terminal.

Extended transit times are the most direct effect. When containers sit at a terminal waiting for drayage capacity, or when vessels wait at anchor for a berth, the total transit time from origin to destination increases. For shippers managing just-in-time inventory or time-sensitive production schedules, these delays can have significant operational consequences.

Detention and demurrage charges accumulate when containers are not picked up from terminals within the free time allowed by the shipping line. These charges can be substantial — hundreds of dollars per container per day — and they are often unexpected by shippers who are not closely monitoring terminal conditions. In a congested environment, even shippers who are trying to pick up their containers promptly may find that drayage capacity is not available within the free time window.

Inventory disruption follows from extended and unpredictable transit times. Shippers who have calibrated their inventory levels to a predictable transit time find those calculations invalidated when congestion adds days or weeks to the supply chain. The response — building larger safety stocks — ties up working capital and increases warehousing costs.

Mode shifting is a common response to port congestion, but it creates its own pressures. When shippers shift freight from marine to truck or rail to avoid port delays, they add demand to those modes, which can create congestion and capacity tightness in the alternative modes as well.

Shippers who are proactive about managing port-related disruptions have several tools available to them.

Advance visibility into terminal conditions is the starting point. Real-time information about terminal congestion, vessel arrival schedules, and drayage availability allows shippers to anticipate problems and respond before they become crises. Several technology platforms now provide this visibility, and working with a logistics partner who monitors terminal conditions as a matter of course is valuable.

Flexible routing options reduce dependence on any single port or corridor. A shipper whose freight can move through either Montreal or Halifax, or through either the Seaway or an all-water Atlantic routing, has more options when one corridor is congested. Building this flexibility into your supply chain requires upfront investment in carrier and forwarder relationships, but it pays dividends when disruptions occur.

Drayage relationships deserve the same attention as over-the-road carrier relationships. The drayage carriers who move containers between port terminals and distribution centres are a critical link in the supply chain, and shippers who have established relationships with reliable drayage providers are better positioned to get their containers moved promptly when capacity is tight.

Inventory positioning can buffer against port-related delays. Shippers who maintain safety stock at inland distribution centres, rather than relying on just-in-time replenishment through the port, are less exposed to the operational consequences of port congestion. The carrying cost of that safety stock is a real expense, but it needs to be weighed against the cost of production disruptions and missed customer commitments.

Seasonal planning is particularly important for Seaway-dependent shippers. The predictable congestion patterns at the beginning and end of the navigation season can be partially mitigated by adjusting shipping schedules — moving freight earlier in the season to avoid the fall rush, or building inventory before the winter closure to reduce dependence on early-season shipments.

Both the Canadian and American governments have recognized the need for investment in Seaway infrastructure. The bi-national St. Lawrence Seaway Management Corporation has ongoing capital programs aimed at maintaining and modernizing the system's infrastructure. The Port of Montreal has invested in terminal expansion and technology upgrades. Several Great Lakes ports have undertaken significant capital projects to increase capacity and improve efficiency.

These investments will help, but they take time to deliver results, and the scale of investment required to fully modernize the system is substantial. In the near term, shippers should plan for a congestion environment that is likely to persist, with periodic acute episodes driven by labour disruptions, weather events, or demand spikes.

The Great Lakes-St. Lawrence Seaway system is a critical piece of Canadian infrastructure, and its performance matters to the entire Central Canadian economy. Managing the risks it presents requires the same level of attention and sophistication that shippers apply to other elements of their supply chains — and the same investment in relationships, visibility, and flexibility that characterizes effective logistics management in any environment.